Dallas firm buys into pipeline

Dallas-based Holly Energy Partners LP said Wednesday it has acquired a 25 percent joint venture interest in a new pipeline system that will bring crude oil into the Salt Lake area.

The 95-mile pipeline is being built by Plains All American Pipeline LP and will supply up to 120,000 barrels of crude oil per day. It will allow refiners in the area, including a Woods Cross refinery owned by a Holly Corp. subsidiary, to ship crude oil from the Utah terminus of the Frontier Pipeline and oil from Wyoming and Utah currently flowing on Plains' Rocky Mountain Pipeline.

Terms of the deal call for the pipeline to be owned by a new joint venture company owned 25 percent by HEP and 75 percent by Plains. Although subject to actual construction cost, HEP said its interest would cost $22 million to $25.5 million in the first quarter of 2008 when the pipeline is expected to become fully operational.

"The new joint venture pipeline is expected to provide a safe and economically efficient vehicle to meet the current and future crude oil transportation requirements of the Salt Lake City refining center," Matt Clifton, HEP's chairman and chief executive officer, said in a prepared statement.

"This new line will not only add substantial capacity to deliver increased quantities of crude oil to Salt Lake City, but it will add the flexibility to transport significantly higher quantities of heavy Canadian crude oils than can currently be transported."

Holly Energy Partners provides refined petroleum product transportation and terminal services to the petroleum industry, including Holly Corp., which owns a 45 percent interest in the partnership. The partnership owns and operates refined product pipelines and terminals in several states, including Utah. The partnership also owns a 70 percent interest in Rio Grande Pipeline Co., which has a line from west Texas to northern Mexico.