USD Partners has entered into a terminal services agreement with USD Clean Fuels, a newly formed subsidiary of US Development Group, for the inbound shipment of renewable diesel on rail and the outbound shipment of the product on tank trucks to local customers.
The agreement has an initial term of five years with a target commencement date of December 1, 2021 and is supported by a minimum throughput commitment to USDCF from an investment-grade rated, refining customer as well as a performance guaranty from USDG.
“We are excited to announce this very accretive opportunity at the Partnership,” said Adam Altsuler, the partnership’s CFO. “This opportunity is incremental to our existing ethanol business at West Colton and is projected to generate additional Adjusted EBITDA of approximately $2m per year at the Partnership over the five-year term. Total capital associated with the opportunity is approximately $1.8m, which we intend to fund from cash flows from operations.”
USDCF is a newly-created entity formed by USDG, the partnership’s sponsor, to focus on providing production and logistics solutions to the growing market for clean energy transportation fuels.
“USDG has created USD Clean Fuels in response to a structural shift in demand associated with decarbonizing the transportation fuels sector,” said Brad Sanders, chief commercial officer for USDG. “We believe our assets, capabilities and vision are ideally suited to serve our customers’ growth plans in clean fuels in terms of both geography and product offering (renewable diesel, sustainable aviation fuel, etc.).”
For more information visit: www.usdpartners.com
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