US-based midstream company Holly Energy Partners has announced to proceed with the expansion of its crude oil transportation system in southeastern New Mexico.
The company is extending the pipeline to address the growing crude oil production in the region.
For the expansion project, Holly Energy will convert an existing refined products pipeline to crude oil service, build new pipeline segments, expand an existing pipeline, and construct new truck unloading stations and crude storage capacity.
The company is expected to incur a cost of about $35m to $40m, excluding the conversion of the existing refined products pipeline.
Expansion of the crude oil transportation system is anticipated to increase the capacity by up to 100,000 barrels per day.
Holly Energy will put the system into service by early 2014.
The company has already secured its board of directors’ approval and has also received enough shipper commitments to proceed with the plans.
The expansion will provide shippers with additional pipeline capacity to common carrier pipeline stations for transportation to
major crude oil markets as wella as to HollyFrontier’s New Mexico refining facilities.
HollyFrontier holds 44% stake in Holly Energy Partners.