Gibson Energy Inc. has announced the sanction of 1 million bbls of new tankage at the Hardisty Terminal, underpinned by a long-term agreement with an investment grade, senior oilsands customer.
“With nearly a half-billion dollars of sanctioned growth capital relative to an annual target of US$150 – 200 million, Gibson has secured the projects required to exceed our 10% growth target through to 2020,” said Steve Spaulding, President and CEO, Gibson. “Importantly, we remain fully funded for all our sanctioned capital through our non-core dispositions and retained cash flows from the first nine months of the year, including our expectation of another very strong contribution from the Wholesale segment in the third quarter. We also remain in discussions with several existing and potential customers regarding their needs for additional tankage and continue to expect we will sanction two to four tanks per year over the medium-term.”
The construction of two new 500 000 bbls tanks represents the third phase of development at the ‘top of the hill’ portion of the Hardisty Terminal, and will leverage certain infrastructure built as part of the prior phases. The third phase is expected to be in service in 1Q20 at a capital cost consistent with the company’s target build multiple of 5x to 7x EBITDA. In aggregate, the three phases currently under construction will add seven new tanks, representing an incremental 3.1 million bbls of storage and an approximately 35% expansion of the Hardisty Terminal.
With the additional capital spending during the current year from the sanction of the third phase of development, the company has increased its 2018 growth CAPEX budget to be in the range of US$275 million to US$325 million.
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