Gibson Energy recently sanctioned the construction of 1 million barrels of new tankage at its Hardisty Terminal in Alberta, Canada.
“The sanction of two new tanks at the Top of the Hill will further increase our high-quality, long-term infrastructure revenues and drive continued distributable cash flow per share growth,” said Steve Spaulding, president and chief executive officer. “We are also very pleased to welcome a new refining customer to the terminal, reflecting the importance of Hardisty to downstream players looking to secure heavy crude feedstocks from Western Canada.
“In addition, we remain in discussions for further tankage opportunities, leading to our confidence in our ability to continue to sanction tankage at a rate of two to four tanks per year in 2020, and beyond.”
Gibson said the expansion includes construction of two 500,000-barrel tanks at the Top of the Hill portion of the Hardisty Terminal. The additional tankage represents an expansion of the fourth phase of development at the Top of the Hill, which is expected to begin service by the end of 2020.
The new tankage will be constructed at a capital cost consistent with the company’s target build multiple of 5x to 7x EBITDA under long-term, take-or-pay and stable fee-based contracts, Gipson maintained. One of the tanks is contracted to a new investment grade refining customer, while the second will be leased to Gibson’s marketing segment under an intercompany agreement with the infrastructure segment.
In November 2019, Gibson placed four new tanks, or 2 million barrels of tankage, into service ahead of schedule and within targeted capital costs, according to the company. With the sanction of additional tankage at the Top of the Hill portion of its Hardisty Terminal, Gibson currently has three tanks representing 1.5 million barrels of tankage currently under construction.
Once the fourth phase of development at the Top of the Hill is placed into service in the fourth quarter of 2020, Gibson will have approximately 13.5 million barrels of storage capacity at its Hardisty Terminal.