Crude oil that moves by rail from Canada to refineries on the Texas Gulf Coast rarely makes headlines, but today piece of that business changed hands. A subsidiary of FTAI Energy Partners LLC, known as Jefferson, agreed to buy the Port Arthur Terminal in Port Arthur, Texas, and a 50% stake in a diluent recovery unit in Hardisty, Alberta, from a subsidiary of USD Group LLC for about $255 million in cash. Jefferson is owned by FTAI Infrastructure Inc. (NASDAQ: FIP).
The two sites work as a pair. Oil from Alberta’s oil sands is so thick that producers blend it with a lighter liquid, called diluent, to help it flow. A diluent recovery unit removes much of that liquid before loading, so each rail car carries more crude. The oil then travels by train to Port Arthur, which is designed to handle about 50,000 barrels per day. From there, a company-owned 12-mile, 24-inch pipeline carries it to the Beaumont terminal of Phillips 66 (NYSE: PSX), where it is distributed to refiners in Beaumont, Lake Charles and other Gulf Coast markets.
The contract behind the terminal matters as much as the equipment. The assets run under a long-term, take-or-pay agreement with a major oil and gas producer that Jefferson describes as investment grade but does not name. In a take-or-pay deal, the customer commits to minimum volumes and pays for that capacity whether or not it uses it. That moves much of the volume risk off the terminal owner and makes the income easier to forecast.
Jefferson expects the assets to generate about $50 million of EBITDA over the next twelve months. EBITDA (earnings before interest, taxes, depreciation and amortization), is a common gauge of the cash an operating business produces before financing costs. Dividing the $255 million price by that figure gives a multiple of about 5 times forward EBITDA. That is a modest price for revenue secured by contract, and it helps explain why the company described the deal as highly accretive for its Jefferson business, meaning it is expected to add to earnings.
The deal is large next to the parent company. The price equals roughly two thirds of FTAI Infrastructure’s market value, but shareholders are not paying with new stock. Jefferson plans to fund the purchase by assuming existing debt of the acquired business and drawing on a committed acquisition loan, and it may later refinance with additional bonds under its existing bond structure. The company says the deal will more than double Jefferson’s Adjusted EBITDA and reduce its leverage. For perspective, all of FTAI Infrastructure reported $76.1 million of Adjusted EBITDA in the second quarter of 2026.
The timing also stands out. On the day of the announcement, West Texas Intermediate, the U.S. oil benchmark, climbed above $96 a barrel and was up more than 3.3% during the session before retreating from its highs. The move followed the President’s rejection of an Iranian peace proposal, leaving talks between Washington and Tehran stalled and keeping attention on the Strait of Hormuz.
Price swings like that make producer profits hard to predict, but a take-or-pay terminal is paid for committed volumes rather than the value of each barrel. That does not remove every risk. Closing still depends on regulatory approvals, which Jefferson expects in the fourth quarter of 2026, and the income rests largely on one customer honoring a long-term commitment.
What Jefferson is buying is a fee-based route for Canadian heavy crude into one of North America’s largest refining hubs, at roughly five years of projected EBITDA. If the deal closes on schedule and the contract performs as described, a relatively small infrastructure company gains a larger and steadier stream of cash at a moment when the oil market is anything but steady.
