HollyFrontier, Holly Energy okay logistics deal

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.
Oct. 10, 2011

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.

About the Author

Bob Tippee

Editor

Bob Tippee has been chief editor of Oil & Gas Journal since January 1999 and a member of the Journal staff since October 1977. Before joining the magazine, he worked as a reporter at the Tulsa World and served for four years as an officer in the US Air Force. A native of St. Louis, he holds a degree in journalism from the University of Tulsa.

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