The leaders of HollyFrontier Corp. have reduced some of their capital spending forecasts for the remainder of 2021 and pushed some renewables investment dollars into 2022.
Speaking to analysts and investors Nov. 3 after reporting their third-quarter results, President and Chief Executive Officer Mike Jennings and Chief Financial Officer Rich Voliva said HollyFrontier’s work on a recent turnaround of its Tulsa refinery and the shrinking of the scope of work at a turnaround now under way at its 100,000 b/d Navajo refinery in New Mexico has enabled them to cut 2021 capex plans on turnarounds and catalysts by $30 million to $290-320 million.
On the renewables side, Jennings and Voliva trimmed their 2021 spending plans by $75 million to $550-600 million, pushing more investments into next year. Dallas-based HollyFrontier is working on three projects—renewable diesel units in Wyoming and New Mexico and a feedstock pretreatment unit in New Mexico—into which it will invest a combined $800-900 million (OGJ Online, June 2, 2020). Jennings said the Wyoming work is running ahead of schedule and should be able to run its first batch of feed late this year.
The timeline of work on the New Mexico pretreatment unit has been moved up “given current economics between refined soybean oil and other feedstocks,” Jennings said, and that facility is now expected to be up and running in the first quarter, about 3 months ahead of its previous schedule—hence the shift in spending. The HollyFrontier team is now looking for the New Mexico renewable diesel unit to be completed in the second quarter.
In all, HollyFrontier plans to spend $175-225 million on renewables projects in 2022. Voliva said he expects to provide companywide capex estimates in December.
During the third quarter, HollyFrontier produced a net profit of $303 million on sales of nearly $4.7 billion. The company’s consolidated refinery gross margin was $14.87 per produced bbl, a 140% jump from the same period of 2020, and crude throughput was about 416,000 b/d, comfortably above executives’ guidance of 380,000-400,000 b/d.
Shares of HollyFrontier (Ticker: HFC) were up slightly in Nov. 3 afternoon trading; they have fallen nearly 10% over the past 6 months. The company this week also announced that it has completed its $614 million purchase of the Puget Sound refinery from Shell (OGJ Online, May 24, 2021). That facility north of Seattle has a capacity of 149,000 b/d and gives Holly Frontier its first refining outpost on the West Coast.