USD Partners LP (USDP) said Oct. 12 it has made a strategic acquisition of a crude terminal in Casper, Wyo., for $225 million.

The Houston company has agreed to acquire 100% of the equity interests in Casper Crude to Rail LLC from Stonepeak Infrastructure Partners, Cogent Energy Solutions and The Granite Peak Group.

The terminal’s advantaged location supports best-in-class access to multiple refining centers across the U.S. This is enhanced by onsite storage and blending capabilities, which enables customers to ship preferred grades of crude oil from Casper.

The deal is the company's first acquisition since its IPO last October, said Dan Borgen, USD CEO.

“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,” Borgen said in a statement.

The Casper terminal’s principal assets include:

  • A Unit train-capable crude oil loading rail terminal with 100,000 barrels per day (bbl/d) of capacity and dual loop tracks;
  • Six customer-dedicated storage tanks with 900,000 bbl of total capacity; and
  • A six-mile, 24-inch diameter pipeline with a direct connection from Spectra Energy Partners LP’s Express crude oil pipeline.

The Express crude oil pipeline runs from Hardisty, Alberta, to Casper, Wyo., and provides access to multiple grades of Canadian crude oil.

The Casper terminal commenced operations in September 2014. It's supported by take-or-pay contracts with primarily investment grade refiners and a weighted-average remaining contract life of approximately three years.

For the full year 2016, the Casper terminal is expected to contribute minimum contracted adjusted EBITDA of about $26 million. The terminal’s footprint and modular design also allows for the addition of a second loading station boosting its storage capacity by 1.1 MMbbl.

The purchase price includes $208.3 million of cash and $16.7 million of limited partner units issued to the sellers.

The company intends to fund the cash portion of the purchase price with about $35 million of cash on hand and about $173 million of senior secured credit facility borrowings. It will also issue about 1.7 million common units as equity consideration based on a unit price of $9.62, the volume-weighted average daily closing price for the its common units for the 30-trading day period prior to Oct. 12.

The company said it expects the transaction will be immediately accretive to distributable cash flow per unit upon closing, which is expected to occur in fourth-quarter 2015.