USD to acquire 100% stake in Casper terminal for $225m

USD Partners will acquire 100% of the equity interests in Casper Crude to Rail (Casper terminal) from Stonepeak Infrastructure Partners, Cogent Energy Solutions and The Granite Peak Group in a deal valued at $225m.

Casper’s principal assets include a unit train-capable crude oil loading rail terminal which has a capacity of 100,000 barrels per day.

Other assets include six customer-dedicated storage tanks with 900,000 barrels of capacity as well as a six-mile pipeline with 24 inch diameter and runs from Hardisty, Alberta, to Casper, Wyoming.

The terminal also provides access to multiple refining centres across the US.

Due to the terminal’s low footprint and modular design, a second loading station and an additional 1.1 million barrels of storage capacity can also be added without disturbing existing operations.

USD Partners CEO Dan Borgen said: "The Casper terminal represents an attractive opportunity to deliver a highly accretive, complementary acquisition to our unit holders and supports the partnership’s ability to achieve its targeted distribution growth over the next several years.

"The terminal’s high-quality customer base and strategic location ensure competitive, sustainable market access, as well as provide an additional platform for heavy crude oil solutions."

The Casper terminal began operations in September 2014.

Casper is expected to contribute minimum contracted adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) of about $26m, for the full year 2016.

The cash portion of the purchase price would be funded by USD with about $35m of cash on hand and about $173m of senior secured credit facility borrowings.

The transaction is expected to close in the fourth quarter.