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Holly Energy planning US$ 15 million oil pipeline expansion in New Mexico

Hydrocarbon Engineering,

Holly Energy Partners has announced two expansion projects to provide 60,000 bpd of additional crude pipeline take-away capacity resulting from increased Delaware Basin drilling activity in southeast New Mexico.

The first project will increase one of HEP’s existing crude oil trunk lines from 35,000 bpd to 60,000 bpd. This 35 mile pipeline transports crude oil from HEP’s extensive lease gathering system in southeast New Mexico to the HollyFrontier Corp. New Mexico refining facilities. The scope of the project includes the replacement of 5 miles of existing pipe with larger diameter pipe and the addition of a higher horsepower pump. Work will commence shortly and is expected to be completed during the first half of 2012.

The second project will consist of the reactivation and conversion to crude oil service of a 70 mile, 8 in. petroleum products pipeline owned by HEP. Once in service this pipeline would be capable of transporting up to 35,000 bpd of crude oil from rapidly developing Delaware Basin production in the Carlsbad, New Mexico area to either a third party common carrier pipeline station for transport to major crude oil markets or to HollyFrontier’s New Mexico refining facilities. It is anticipated that this project, subject to receipt of acceptable shipper support and board approval, could also be completed during the first half of 2012.

The cost of these two projects is currently estimated at approximately US$ 15 million.

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