Holly Energy Partners Announces Recent Acquisitions
Holly Energy Partners LP recently acquired a 50 percent interest in Frontier Pipeline Co. and it also announced that it has an agreement in principle for the acquisition by Holly Energy of the newly constructed naphtha fractionation and hydrogen generation units.
Holly Energy acquired the 50 percent interest in Frontier Pipeline Co., owner of the Frontier Pipeline, from an affiliate of Enbridge Inc. The Frontier Pipeline will continue to be operated by an affiliate of Plains All American Pipeline LP, which owns the remaining 50 percent interest.
The 296-mile crude oil pipeline, which runs from Casper, Wyoming to Frontier Station, Utah, has a 72,000 barrel per day (bpd) capacity. The Frontier Pipeline supplies Canadian and Rocky Mountain crudes to Salt Lake City area refiners through a connection to the SLC Pipeline.
As for the newly constructed naphtha fractionation and hydrogen generation units, those are at HollyFrontier Corp.’s El Dorado refinery. Holly Energy is expected to pay HollyFrontier cash consideration of approximately $62 million, subject to the execution of definitive agreements and other customary closing conditions.
Both HollyFrontier and Holly Energy expect the proposed transaction will close during the fourth quarter of 2015. In connection with the closing of the proposed transaction, HollyFrontier and Holly Energy expect to enter into 15-year tolling agreements containing minimum quarterly throughput commitments from HollyFrontier. Holly Energy expects that the transaction will be immediately accretive to unitholders.Holly energy, HollyFrontier, Texas