CALGARY, AB, Dec. 14, 2021 /PRNewswire/ - US Development
Group, LLC (through a wholly-owned affiliate, collectively USD) and
Gibson Energy Inc. (Gibson) (TSX: GEI) announced the diluent
recovery unit (DRU) has been declared fully operational and the
shipment of DRUbit™ by Rail™ (DBR) has commenced. The DBR
network creates a first-of-its-kind separation technology and
network that safely and sustainably moves heavy Canadian crude oil,
also known as bitumen, from Canada
to the U.S. Gulf Coast at a cost that is competitive with pipeline
alternatives.
The DRU is located at the Hardisty Energy Terminal (HET) near
Hardisty, Alberta and is a 50%/50%
joint venture between USD and Gibson. HET is located adjacent to
USD's existing Hardisty Rail Terminal, which is the origination
terminal for transloading the DRUbit™ onto railcars for shipment.
The current destination terminal for the DRUbit™ is the USD-owned
and operated Port Arthur Terminal (PAT) in Port Arthur, Texas. The DRUbit™ is owned by
ConocoPhillips. This DBR network is highly scalable and is
well-positioned for future commercial expansions. USD and Gibson
continue to pursue commercial discussions with current and
potential producer and refiner customers to secure additional
long-term agreements to support future expansions at both the DRU
and the PAT.
USD's patented DRU technology separates the diluent that has
been added to the raw bitumen in the production process, which
meets two important market needs. It creates DRUbit™, a proprietary
heavy Canadian crude oil or bitumen that ships by rail and does not
meet any of the defined categories of hazardous materials by U.S.
DOT Hazardous Materials regulations and Canada's Transport of Dangerous Goods
regulations, creating safety and environmental benefits.
Additionally, it returns the recovered diluent to ConocoPhillips at
HET for reuse in the Western Canadian market, which reduces
delivered costs for diluent. The DBR network provides meaningful
safety, economic and environmental benefits relative to
conventional crude by rail.
The DRU at HET is operating at or above its nameplate capacity
of 50,000 barrels per day of inlet bitumen blend, which the DRU
separates into DRUbit™ and diluent. Transporting DRUbit™ by Rail™
is projected to reduce carbon emissions nearly 20% relative to
dilbit by rail alternatives and approximately 30% compared to
dilbit by pipeline alternatives.
The DBR network is supported by Canadian Pacific (CP) (TSX: CP,
NYSE: CP) and Kansas City Southern Railway Company (KCS). As the
initial destination terminal, PAT is unloading DRUbit™, blending it
to customers' specifications, and delivering it downstream through
pipe or barge at or above current contractual requirements. PAT has
significant marine, pipeline, rail and tank expansion capabilities
and it is pipeline connected to Phillips 66's Beaumont Terminal,
providing customers access to a large network of refining and
marine facilities. PAT has the infrastructure and ability to
support growth, including allowing for efficient rail movements
along mainlines from Canada and
into the growing Mexico
market.
Quotes
The Honorable Jason Kenney, Premier of Alberta
"Alberta's government is obsessed with creating
the best environment for job creation in Canada. We know that is the best way to
attract innovators and entrepreneurs, who will help kick-start
Alberta's recovery. Not only will
this vote of confidence in Alberta's economy help to create jobs, it
helps to tell our story about our energy industry, and how it
constantly strives to lead the world in innovation and emissions
reductions. Thank you to CP, Gibson Energy, US Development Group,
ConocoPhillips, and Kansas City Southern for helping to ensure the
strength and sustainability of Alberta's energy sector."
ConocoPhillips Canada
"Using the DRU separation
technology and DRUbit™ by Rail™ network improves netbacks
and overall returns as we move our bitumen production to high-value
North American markets," said Bij Agarwal, President,
ConocoPhillips Canada. "An innovative solution, the DRU separation
technology and DRUbit™ by Rail™ network – which provide
transportation safety and environmental benefits – will also create
jobs along the rail routes and help to address constrained market
access, for the benefit of all Canadians."
USD
"Our DRU separation technology and DRUbit™ by
Rail™ network create a first-of-its-kind infrastructure to
move heavy Canadian crude throughout North America in a way that is safe,
environmentally beneficial and economically advantaged to current
pipeline alternatives," said USD CEO, Dan
Borgen. "The project stands to strengthen communities with
long-term, high quality jobs along the current and future rail
routes. We are thrilled to work with ConocoPhillips Canada, Gibson,
CP, and KCS to deliver this industry solution that we believe will
positively impact our existing and future producer and refiner
customers."
Gibson
"We were pleased to see the Hardisty Energy Terminal fully
operational in-line with budgeted capital cost," said Steve Spaulding, Gibson's President and Chief
Executive Officer. "We consider DRUs to be a cost-effective,
scalable, environmentally attractive long-term egress solution for
the basin, and we remain in commercial discussions for potential
additional phases at the Hardisty Energy Terminal.
Importantly, we believe that this and future phases will improve
netbacks for producers, driving increased oilfield and related
business activity, creating new jobs and helping revive
communities."
CP
"The launch of DRUbit™ by Rail™ over the CP network helps
us to achieve key sustainability goals while creating new
efficiencies for customers," said Keith
Creel, CP's President and Chief Executive Officer. "CP is
proud to work with USD and Gibson to make this innovative terminal
a success."
KCS
"KCS is pleased to be a strategic partner in this innovative
solution to improve the safety and economics of moving crude oil,"
said KCS President and Chief Executive Officer Patrick J. Ottensmeyer. "It's also a great
opportunity to grow our business in the Gulf Coast area and further
develop our strategic presence in the Port Arthur market."
Investor & Media Contacts
Gibson Investor
Relations
Mark Chyc-Cies
Vice President, Strategy, Planning & IR
403-776- 3146
mark.chyc-cies@gibsonenergy.com
Gibson
Media Wendy
Robinson Director,
Communications & Brand 403-827-6057 Wendy.robinson@gibsonenergy.com
|
USD Group
Mary Ellen Kilpatrick 713-412-1545 maryellen@goodengroup.com
|
|
About USD
USD and its affiliates are engaged in designing, developing,
owning, and managing large-scale multi-modal logistics centers and
energy-related infrastructure across North America. USD solutions create flexible
market access for customers in significant growth areas and key
demand centers, including Western
Canada, the U.S. Gulf Coast and Mexico. Among other projects, USD is currently
pursuing the development of a premier energy logistics terminal on
the Houston Ship Channel with capacity for substantial tank
storage, multiple docks (including barge and deepwater), inbound
and outbound pipeline connectivity, as well as a rail terminal with
unit train capabilities. For additional information, please visit
www.usdg.com. DRUbit™ and DRUbit™ by Rail™ are trademarks of DRU
Assets LLC, a subsidiary of USD, and are used by permission.
All rights reserved.
About Gibson
Gibson is a Canadian-based oil infrastructure company with its
principal businesses consisting of the storage, optimization,
processing, and gathering of crude oil and refined
products. Headquartered in Calgary,
Alberta, Gibson's operations are focused around its core
terminal assets located at Hardisty and Edmonton, Alberta, and also include the Moose
Jaw Facility and an infrastructure position in the U.S. Gibson
shares trade under the symbol GEI and are listed on the Toronto
Stock Exchange. For more information regarding Gibson as well as
the DRU project visit www.gibsonenergy.com and Gibson's profile on
SEDAR at www.sedar.com.
About ConocoPhillips Headquartered in Houston, Texas, ConocoPhillips had operations
and activities in 15 countries, $84
billion of total assets, and approximately 10,300 employees
at March 31, 2021. Production
excluding Libya averaged 1,488
MBOED for the three months ended March 31,
2021, and proved reserves were 4.5 BBOE as of Dec. 31, 2020. Its Canadian operations are
focused on developing its world-class portfolio including the
ConocoPhillips-operated Surmont Joint Venture with TOTAL E&P
Canada in the Athabasca region of
northeast Alberta and exciting
opportunities in the liquids-rich Montney play in northeast British Columbia. For more information, go to
www.conocophillips.ca.
About Canadian Pacific
Canadian Pacific (CP) is a transcontinental railway in Canada and the
United States with direct links to major ports on the west
and east coasts. CP provides North American customers a competitive
rail service with access to key markets in every corner of the
globe. CP is growing with its customers, offering a suite of
freight transportation services, logistics solutions and supply
chain expertise. Visit www.cpr.ca to see the rail advantages of
CP.
About the Kansas City Southern Railway Company
Headquartered in Kansas City, Mo.,
Kansas City Southern (KCS) is a transportation holding company that
has railroad investments in the U.S., Mexico and Panama. Its primary U.S. holding is The Kansas
City Southern Railway Company, serving the central and south
central U.S. Its international holdings include Kansas City
Southern de Mexico, S.A. de C.V.,
serving northeastern and central Mexico and the port cities of Lázaro Cárdenas,
Tampico and Veracruz, and a 50 percent interest in
Panama Canal Railway Company,
providing ocean-to-ocean freight and passenger service along the
Panama Canal. KCS' North American rail holdings and strategic
alliances with other North American rail partners are primary
components of a unique railway system, linking the commercial and
industrial centers of the U.S., Mexico and Canada. More information about KCS can be
found at www.kcsouthern.com.
About DRUbit™
USD's patented DRU technology separates the diluent that has been
added to the raw bitumen in the production process which meets two
important market needs – it returns the recovered diluent for reuse
in the Alberta market, reducing
delivered costs for diluent, and it creates DRUbit™, a proprietary
heavy Canadian crude oil specifically designed for rail
transportation. DRUbit™ is crude oil or bitumen that has been
returned to a more concentrated, viscous state that creates safety
and environmental benefits when transported by rail in Canada and the U.S. DRUbit™ is a market
access solution that will satisfy demand for heavy Canadian crude
oil on the U.S. Gulf Coast and in other markets at a cost that is
economically competitive to the crude oil that is transported by
pipeline today.
Information on websites referenced in this press release are not
part of this press release.
Forward Looking Statements
Certain statements
contained in this press release constitute forward-looking
information and statements (collectively, forward-looking
statements) including, but not limited to, statements
concerning the anticipated benefits, opportunities, operations and
sustainability of the DRU and DRUbit™, oil field and related
business activities, market participants, local communities and
governments, carbon emissions reduction, the methods of
transportation of DRUbit™ and contribution of the DRU to the
improvement of market access for oil producers, operation of USD's
Port Arthur terminal and growth
plans for such terminal, improved industry economics associated
with the DRU and transportation of DRUbit™, the safety
features of the transportation of DRUbit™ and expectations with
respect to the business and financial prospects and opportunities
related to the DRU and DRUbit™ transportation.
These statements relate to future events or future
performance. All statements other than statements of historical
fact are forward-looking statements. The use of any of the words
"anticipate", "plan", "aim", "target", "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. The forward looking statements reflect the project
participant's beliefs and assumptions with respect to, among other
things, the continued fully operational status of the DRU,
continued market demand, general economic trends, industry trends,
commodity prices, capital markets, the governmental, regulatory and
legal environment in the various jurisdictions in which they
individually, or collectively, conduct and will conduct their
respective business, ability to obtain qualified personnel and
equipment in a timely and cost-efficient manner, ability to
generate sufficient cash to meet its current and future
obligations, the successful and timely implementation of capital
projects in a manner consistent with financial expectations and the
other business activities of the participants, and other
assumptions inherent in management's expectations of future
operating and financial results and other forward-looking
statements identified herein.
Forward-looking 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. Although the project participants
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 press release should
not be unduly relied upon. Actual results could differ materially
from those anticipated in these forward looking statements as a
result of, among other things, risks inherent in the businesses
conducted by each of the project participants, ability for Gibson
and USD to secure additional long-term, take-or-pay agreements with
other producer and refiner customers to fully underpin the
economics of the project, conditions associated with the DRU and
its operation, the ability of customers to discover and market
reserves, regulatory decisions, competitive factors in the
industries in which the project participants operate, prevailing
economic conditions, carbon emissions reduction capabilities,
world-wide demand for crude oil and petroleum products, volatility
of commodity prices, currency and interest rates fluctuations,
product supply and demand (including demand for DRUbit™), changes
in credit ratings applicable to any of the participants, operating
costs and the accuracy of cost estimates, exposure to
counterparties and partners, future capital expenditures, ability
to maintain necessary regulatory approvals for the DRU and USD's
Port Arthur terminal, the
availability, costs, terms and timing of or execution of, and
competition for, required regulatory approvals, rail capacity and
terminal access, changes to any of the project participants'
business plans or strategy, ability to access various sources of
debt and equity capital, generally, and on terms acceptable to the
respective participant, changes in government policies, laws and
regulations, including environmental and tax laws and regulations,
competition for employees and other personnel, equipment, material
and services related thereto, the availability and cost of
employees and other personnel, equipment, materials and services,
weather, including its impact on product demand, exploration,
production and transportation, inherent risks associated with the
exploration, development, production and transportation of bitumen,
the timing and extent of changes in foreign currency exchange
rates, interest rates, inflation rates, global and domestic
financial market conditions and global and domestic general
economic conditions, political developments around the world,
including the areas in which the project participants individually,
or collectively, operate, many of which are beyond the
control of any of the project participants. Readers are cautioned
that the foregoing lists are not exhaustive. For a full discussion
of the material risk factors please refer to those included in
Gibson's Annual Information Form dated February 22, 2021 as filed on SEDAR and available
on the Gibson website at www.gibsonenergy.com, the more detailed
information about factors that could affect future events may be
found in filings by ConocoPhillips with the Securities and Exchange
Commission including ConocoPhillips' Annual Report on Form 10-K for
the year ended December 31, 2020 and
subsequent reports, those detailed from time to time in reports
filed by CP with securities regulators in Canada and the
United States under "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations - Forward-Looking Information" in CP's annual and
interim reports on Form 10-K and 10-Q, and the more detailed
information about factors that could affect future events may be
found in filings by KCS with the Securities and Exchange Commission
including KCS' Annual Report on Form 10-K for the year ended
December 31, 2020 and subsequent
reports.
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SOURCE Gibson Energy Inc.