Holly Energy Partners has entered into an agreement with an affiliate of Plains All American Pipeline to construct and operate a new 95-mile intrastate pipeline system.
It is being constructed by an affiliate of Plains, for the shipment of crude oil into the Salt Lake City, Utah area. The pipeline will be owned by a new joint venture company which will be 75%-owned by an affiliate of Plains and 25% by an affiliate of Holly Energy Partners (HEP).
An affiliate of HEP will purchase its interest in the joint venture for between $22 million and $25.5 million, depending on the actual construction costs of the pipeline.
The purchase is expected to occur in the first quarter of 2008, which is when the new pipeline system is expected to become fully operational. The pipeline is being built to provide transportation services to various refiners in the area, including the Woods Cross refinery owned by a subsidiary of HEP.
The pipeline will transport crude oil into the Salt Lake City area from the Utah terminus of the Frontier pipeline and crude oil from Wahsatch station.