The agreement, which was effective in September, contains take-or-pay terms for terminalling and storage services, as well as fees associated with actual throughput volumes and other services.

The agreement will support the construction of an outbound pipeline connection from the Casper Terminal to complement its current inbound pipeline connection to the Express Pipeline and an additional storage tank to facilitate blending and staging operations for the customer.

The customer will utilize an existing tank at the Casper Terminal for a three-year term and a second tank, once constructed or available, for another three-year term. The construction of the second tank, if needed, is expected to be completed in the second half of 2019.

“We are pleased to announce this strategic investment in our Casper Terminal,” said Randy Balhorn, US Development Group’s Vice President of Business Development.

“We have mentioned our hub strategy at Casper on previous public earnings calls, and this is the first step in realizing that vision. The outbound pipeline connection and additional storage capacity at Casper will contribute to the long-term sustainability of the terminal, giving our customers increased connectivity to various refining centers and pipeline networks.”

“We are excited to announce this accretive, organic growth project at the Partnership,” said Adam Altsuler, the Partnership’s Chief Financial Officer.

“The Partnership intends to spend approximately $16 million of capital expenditures on the new pipeline connection and storage tank capacity at Casper, which we expect will be completed at an attractive build multiple between 3.0-5.0x Adjusted EBITDA, depending on actual throughput. The total spend will be funded from cash flows from operations and borrowings on our revolving credit facility.”

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