USD Partners LP (USDP) has taken measures in response to the coronavirus outbreak, but all of its terminals remain and are expected to remain fully operational, it has announced. 

To reassure the market, it said “substantially all of its cash flows are generated from multi-year, take-or-pay terminalling services agreements related to its crude oil terminals, which include minimum monthly commitment fees”. 

Its Hardisty and Stroud terminals are currently contracted at 100 per cent of their capacities under multi-year take-or-pay terminalling services agreements with mainly investment-grade rated customers. 

Elsewhere, the Casper terminal’s capacity is currently partially contracted under multi-year agreements with an investment-grade multinational customer and a producer customer that provide for take-or-pay terms for terminalling and storage services and variable fees associated with actual throughput volumes and other services.

USDP’s customers include major integrated oil companies, refiners and marketers, the majority of which are investment-grade rated.

It said measures include sanitation of all surfaces multiple times a day, social distancing (wherever practical), split crew changes and full lock-down of facilities except for approved contractors and services providers.

Dan Borgen, CEO and President, said: “This is a difficult time for our industry. Our core business is sound and our customer profile is strong. We continue to be bullish on our ability to renew and extend our contracts at the Partnership’s Hardisty terminal, particularly in connection with potential growth opportunities at our Sponsor’s Diluent Recovery Unit (DRU) joint venture project, and our ability to identify and secure future opportunities at the Cushing hub via the Partnership’s Stroud Terminal.” 

“In addition”, he added, “we continue to monitor the challenges relating to the Casper Terminal’s cash flow and work with existing and potential new customers to expand our business opportunities at the terminal, including opportunities that may result from Enbridge Inc.’s planned 50 000 bpd expansion of its Express Pipeline through the use of drag reducing agent and pump stations.”

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19th March 2020