HOUSTON–(BUSINESS WIRE)–USD Partners LP (NYSE:USDP) (“USDP” or the “Partnership”) announced today that the Partnership has entered into a Terminal Services Agreement with USD Clean Fuels LLC (“USDCF”), a newly-formed subsidiary of US Development Group, LLC (“USDG”). The Terminal Services Agreement provides for the inbound shipment of renewable diesel on rail and the outbound shipment of the product on tank trucks to local consumers. 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. This opportunity is incremental to our existing ethanol business at West Colton and is projected to generate additional Adjusted EBITDA of approximately $2.0 million per year at the Partnership over the five-year term,” said Adam Altsuler, the Partnership’s Chief Financial Officer. “Total capital associated with the opportunity is approximately $1.8 million, 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…