HollyFrontier, Holly Energy okay logistics deal

By OGJ editors

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.

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