Holly Energy Partners LP (HEP) is expanding its crude oil transportation system in southeastern New Mexico in response to increased production in the area. HEP will convert an existing refined products pipeline to crude oil service, construct several new pipeline segments, expand an existing pipeline, and build truck unloading stations and crude storage capacity.
HEP estimates the project will increase capacity by as much as 100,000 b/d across its system and will be in service no later than early 2014. The expansion will provide shippers with additional pipeline takeaway capacity to either common carrier pipeline stations for transportation to major crude oil markets or to HollyFrontier’s Corp.’s 100,000-b/d Navajo refinery in Artesia, NM.
Excluding the value of the existing pipeline to be converted, total capital expenditures are expected to be $35-40 million. The project has been approved by HEP’s board and has already received the necessary shipper support.