The short-term agreement includes take-or-pay provisions with a minimum volume commitment.
The customer is entering into the agreement as a trial period to test the Stroud Terminal as a destination for its waxy crude oil production out of the Uinta Basin.
If the testing period is successful, it is expected that a longer-term TSA could be executed with the customer.
“As previously discussed during our first quarter 2023 earnings call, we are excited about this new business opportunity and the re-purposing of our Stroud Terminal to handle waxy crude from the Uinta Basin,” said Brad Sanders, USD Group’s chief commercial officer.
“The Uinta Basin’s significant growth trajectory is constrained by its lack of access to rail logistics destinations, and our Stroud Terminal is uniquely positioned to provide direct access to meaningful market optionality that exists at the Cushing crude oil hub.”