Holly Corporation and Holly Energy Partners Announce Salt Lake City to Las Vegas Refined Products Pipeline Project
09 Juillet 2007 - 1:00PM
PR Newswire (US)
DALLAS, July 9 /PRNewswire-FirstCall/ -- Holly Corporation
(NYSE:HOC) and Holly Energy Partners (NYSE:HEP) announced today
that Holly has entered into a Memorandum of Understanding with
Sinclair Transportation Company ("Sinclair") to jointly build with
Sinclair a new refined products pipeline that will run from Salt
Lake City, Utah to Las Vegas, Nevada, together with terminal
facilities in the Cedar City, Utah area and North Las Vegas (the
"UNEV Pipeline"). HEP, a publicly traded petroleum logistics
limited partnership, in which Holly owns a 45 percent interest and
is the general partner, is expected to be the operator and to have
an option to purchase Holly's interest in the project, effective
for a 180-day period commencing when the UNEV Pipeline becomes
operational, at a purchase price equal to Holly's share of actual
costs, plus interest at 7% per annum. The Memorandum of
Understanding contemplates that, subject to the execution of
definitive agreements, Holly will own a 75% interest and Sinclair
will own a 25% interest in the project. The estimated total cost of
the pipeline and two terminals is $300 million, with an expected
completion date at the end of 2008. Permit work on the project
commenced in June 2006, and it is anticipated that all required
permits for the construction of the UNEV Pipeline will be received
by April 2008. Orders for pipe and terminal tankage have been
placed and construction bid packages for the project are expected
to be delivered to contractors in August 2007. The pipeline system
will be a twelve-inch line with an initial capacity of 62,000
barrels per day expandable to 120,000 barrels per day. The UNEV
Pipeline will be a common carrier system that will offer refiners
in the Salt Lake City area, as well as shippers into Salt Lake City
on the Pioneer Pipeline, the ability to transport refined products
to Las Vegas, Nevada and the fast growing areas of Southwest Utah.
"This project is a win-win situation for the communities of Salt
Lake City, Las Vegas, and Southern Utah as well as Rocky Mountain
refiners," said Matthew P. Clifton, Chairman and CEO of Holly.
"Salt Lake City, Las Vegas and several of the cities in Southern
Utah are among the fastest growing communities in the United States
with increasing energy demands. Las Vegas for the first time will
have a diversified source of refined petroleum products to meet its
growing demand, rather than depending solely on refined products
from Southern California. Salt Lake City and Rocky Mountain
refiners, which have become more and more cost efficient due to
their proximity to competitively priced Canadian and Black Wax
crude oils, will now have an opportunity to expand their facilities
to meet growing demand in Las Vegas and Southern Utah while more
cost effectively addressing rising seasonal peak demand
requirements for refined products in the Salt Lake City area."
"Holly, Sinclair and Holly Energy will work together on the
project, drawing upon HEP's expertise in the construction and
operation of logistical assets. Giving HEP an option to purchase
Holly's share of the UNEV Pipeline after it becomes operational
would allow Holly to preserve a core business growth opportunity
for HEP without HEP financial commitments in connection with the
UNEV Pipeline during the construction phase of the project." About
Holly Corporation: Holly Corporation, headquartered in Dallas,
Texas, is an independent petroleum refiner and marketer that
produces high value light products such as gasoline, diesel fuel
and jet fuel. Holly operates through its subsidiaries a 83,000
barrels per day ("bpd") refinery located in Artesia, New Mexico and
a 26,000 bpd refinery in Woods Cross, Utah. Holly also owns a 45%
interest (including the general partner interest) in Holly Energy
Partners, L.P. About Holly Energy Partners: Holly Energy Partners,
L.P., headquartered in Dallas, Texas, provides petroleum product
transportation and terminal services to the petroleum industry,
including Holly Corporation, which owns a 45% interest in the
Partnership. The Partnership owns and operates product pipelines
and terminals primarily in Texas, New Mexico, Oklahoma, Arizona,
Washington, Idaho and Utah. In addition, the Partnership owns a 70%
interest in Rio Grande Pipeline Company, a transporter of LPGs from
West Texas to Northern Mexico. The following is a "safe harbor"
statement under the Private Securities Litigation Reform Act of
1995: The statements in this press release relating to matters that
are not historical facts are "forward-looking statements" within
the meaning of the federal securities laws. These statements are
based on our beliefs and assumptions using currently available
information and expectations as of the date hereof, are not
guarantees of future performance and involve certain risks and
uncertainties, including those contained in our filings made from
time to time with the Securities and Exchange Commission. Although
we believe that the expectations reflected in these forward-looking
statements are reasonable, we cannot assure you that our
expectations will prove correct. Therefore, actual outcomes and
results could materially differ from what is expressed, implied or
forecast in these statements. The forward-looking statements speak
only as of the date made and, other than as required by law, we
undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. DATASOURCE: Holly Corporation; Holly
Energy Partners CONTACT: Stephen J. McDonnell, Vice President and
Chief Financial Officer, +1-214-871-3555, or M. Neale Hickerson,
Vice President-Investor Relations, +1-214-871-3555, both of Holly
Corporation - Holly Energy Partners Web site:
http://www.hollycorp.com/
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