U.S. Development Group Partners with Gibson Energy to Develop Crude-by-Rail Terminal Near Hardisty, Alberta
CALGARY / August 6, 2013
U.S. Development Group LLC (“USDG”), a Houston based developer of rail logistics and terminal facilities and Gibson Energy Inc. (“Gibson”), TSX: GEI, a Calgary based midstream energy company, today announced that they have partnered to expand USDG’s industry-leading crude-by-rail development to Canada and increase transportation optionality for Gibson’s Hardisty Terminal customers. Gibson and USDG have jointly secured sufficient customer term commitments to construct a new state-of-the-art unit train rail loading facility near Hardisty, Alberta, with pipeline connectivity from Gibson’s Hardisty Terminal (collectively, “the Hardisty Rail Terminal”).
“USDG has pioneered the crude-by-rail concept in key markets across the U.S.,” said Mike Day, USDG’s Vice President. “With the Hardisty Rail Terminal, we have expanded the platform to accommodate increasing Canadian production. Developed in partnership with Gibson, the Hardisty Rail Terminal will give Canadian oil producers flexibility to obtain the best value for their product and refiners expanded access to price advantaged crude oil supplies.”
Rick Wise, Gibson’s Senior Vice President Operations, stated, “Our Hardisty Terminal is well connected to all the major pipelines coming into and leaving the Hardisty area. The development of the Hardisty Rail Terminal provides our customers with more optionality to facilitate crude oil movements across North America. We continue to progress discussions with several customers in conjunction with USDG regarding further commitments to the Hardisty Rail Terminal.”
The Hardisty Rail Terminal will handle multiple grades of crude oil with an initial capacity of 140,000 barrels per day. All crude handled by the Hardisty Rail Terminal will be exclusively transferred by pipeline from Gibson’s Hardisty Terminal, located approximately five kilometers away. Served by the Canadian Pacific (“CP”) Railroad’s North Main Line, the Hardisty Rail Terminal will provide Canadian oil producers and marketers a safe and efficient method for transporting their product to major refining and distribution markets across North America.
“The Hardisty Rail Terminal will be a significant rail hub and is located on CP’s high-capacity north main line with efficient access to the refining markets across North America,” said CP Vice-President of Energy and Merchandise, Tracy Robinson. “Canadian Pacific is pleased to work with USDG and Gibson in providing the capability to move crude to market via rail. The capacity, flexibility, market access and speed to market that rail offers makes it an important option for the transportation of crude.”
The Hardisty Rail Terminal will be capable of handling two unit trains per day of up to 120 railcars each and will consist of a fixed loading rack with 30 railcar loading positions, plus a unit train staging area and loop tracks capable of holding up to five unit trains. The Hardisty Rail Terminal is targeted to begin operation in the first quarter of 2014.
As part of the project, Gibson will install required pumping equipment and construct a pipeline for the transfer of crude from its Hardisty Terminal to the USDG crude-by-rail facility. Term contracts with four investment grade customers for approximately 100,000 barrels per day and a connection agreement between Gibson and USDG provide the support for the capital investment.
About U.S. Development Group
U.S. Development Group companies are engaged in designing, developing, owning and managing large-scale rail logistics centers throughout North America. U.S. Development Group is the industry leader in unit rail facility development for liquid product distribution. For more information, go to www.us-dev.com
Gibson is a large, independent midstream energy company in Canada and an integrated service provider to the oil and gas industry in the United States. Gibson is engaged in the movement, storage, blending, processing, marketing and distribution of crude oil, condensate, natural gas liquids, water, oilfield waste and refined products. Gibson transports energy products by utilizing its network of terminals, pipelines, storage tanks, and trucks located throughout western Canada and through its significant truck transportation and injection station network in the United States. Gibson also provides emulsion treating, water disposal and oilfield waste management services in Canada and the United States and is the second largest retail propane distribution company in Canada.
For further information, please contact:
For U.S. Development Group
Gooden Group Public Relations
For Gibson Energy Inc.
Vice President Investor Relations and Communications
Certain statements contained in this news release constitute forward-looking information and statements (collectively, “forward-looking statements”) including but not limited to statements concerning the development of the Hardisty Rail Terminal and Gibson’s and USDG’s expectations with respect to the business and financial prospects and opportunities that the construction and operation of the Hardisty Rail Terminal may provide Gibson and USDG. These statements relate to future events or the future performance of Gibson and USDG. All statements other than statements of historical fact are forward-looking statements. The use of any of the words ‘‘anticipate’’, ‘‘plan’’, ‘‘contemplate’’, ‘‘continue’’, ‘‘estimate’’, ‘‘expect’’, ‘‘intend’’, ‘‘propose’’, ‘‘might’’, ‘‘may’’, ‘‘will’’, ‘‘shall’’, ‘‘project’’, ‘‘should’’, ‘‘could’’, ‘‘would’’, ‘‘believe’’, ‘‘predict’’, ‘‘forecast’’, ‘‘pursue’’, ‘‘potential’’ and ‘‘capable’’ and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements with such risks and uncertainties including, but not limited to, the completion of the Hardisty Rail Terminal, the failure of Gibson and USDG to obtain the necessary regulatory and third party approvals required in order to develop the Hardisty Rail Terminal and the risks and uncertainties described in “Forward-Looking Statements” and “Risk Factors” included in Gibson’s Annual Information Form dated March 5, 2013 as filed on SEDAR and available on Gibson’s website at www.gibsons.com. Although Gibson and USDG believe these statements to be reasonable, no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. The forward-looking statements contained in this news release represent Gibson’s and USDG’s expectations as of the date hereof, and are subject to change after such date. Gibson and USDG disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as may be required by applicable securities regulations.