Holly Energy, Plains form Cushing joint venture

Holly Energy Partners LP (HEP) and Plains All American Pipeline have formed a 50-50 joint venture, Cushing Connect Pipeline & Terminal LLC. The JV will develop and construct a 160,000-b/d common carrier crude oil pipeline that will connect the Cushing, Okla., crude oil hub to the Tulsa refining complex owned by a HollyFrontier Corp. subsidiary.

The JV also will own and operate 1.5 million bbl of crude oil storage in Cushing. The JV terminal is expected to be in service during the second quarter of 2020. The pipeline is expected to be in service during the first quarter of 2021. Long-term commercial agreements have been secured to support the JV assets.

The JV will contract with an affiliate of HEP to manage the construction and operation of the pipeline and with an affiliate of Plains to manage the operation of the terminal. The total investment, estimated at $130 million, will be shared proportionately by the partners. The estimate includes the existing JV terminal contributed by Plains valued at $40 million.