Holly Energy Partners LP has agreed to acquire pipelines and other logistical properties at HollyFrontier Corp.’s El Dorado, Kan., and Cheyenne, Wyo., refineries for $340 million.
At closing, the companies will enter into 15-year throughput agreements with minimum annual revenue commitments by HollyFrontier, from which Holly Energy expects additional revenue of $47 million/year.
Holly Energy will pay in promissory notes with an aggregate original principal amount of $150 million and about 3.8 million common units valued at $190 million.
At HollyFrontier’s 150,000-b/d El Dorado refinery, the transaction covers storage tanks with 3.7 million bbl of total capacity, a truck-loading rack for oil products and another rack for propane, and related product pipeline connections.
Properties covered by the deal at the 52,000-b/d Cheyenne refinery include 1.8 million bbl of storage tanks, a products-loading rack, two propane-loading spots, three crude oil lease automatic custody transfer units, and a crude oil receiving pipeline.
A subsidiary of HollyFrontier holds a 34% interest in Holly Energy, including a 2% general partner interest. Both companies are based in Dallas.