Construction of Alberta crude unit expected to start in April

USD and Gibson received regulatory approvals from the Alberta government in February to construct the unit, and they have finalized their commercial agreements with the ConocoPhillips subsidiary. USD and Gibson are also in talks with other potential producer and refiner customers to secure long-term, take-or-pay agreements at the unit, which could expand the DRU’s capacity.

As USD and Gibson are constructing the DRU in Alberta, USD will also be constructing a new destination terminal in Port Arthur, Texas, where the product will be transloaded. The terminal will have capabilities for rail unloading, barge dock loading and unloading, tank storage, and blending. The terminal will also be connected via pipeline to Phillips 66’s Beaumont Terminal.

The completion of the DRU project will extend approximately 32% of the terminal’s current capacity through mid-2031, USD said. For now, virtually all of Hardisty’s capacity has been renewed or extended through mid-2022, with approximately 73% extended through mid-2023 through multiyear take-or-pay agreements.

USD’s rail facility at Hardisty, a joint venture between USD and Gibson, currently has the ability to load two 120-railcar unit trains per day, and it has a fixed loading rack with 30 railcar loading positions, a unit train staging area and loop tracks that can hold five unit trains simultaneously. CP serves the terminal.

The terminal itself is a major North American crude oil hub, serving as an origination point for various grades of Canadian crude to U.S.-bound export pipelines. Gibson has access to most of the major pipeline systems in the Hardisty hub, according to USD.

Gibson says it has 10 million barrels of storage capacity at Hardisty, with an additional 2 million barrels slated to come online by the end of this year.