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Holly Energy Partners is a Delaware limited partnership formed in early 2004 by HollyFrontier. We hold a particularly strategic position within the industry for several reasons: Our assets are located in attractive high-growth markets: Our pipelines and terminals serve our customers' marketing operations in the Southwest, Rocky Mountain and Mid-West regions of the U.S. In many of our core markets, demand for light refined products exceeds local production, due in part to above-average population growth. Population growth in these markets should increase demand for light refined products shipped on our pipelines. A substantial part of our business operates under long-term contracts: We conduct most of our operations pursuant to long-term contracts, which enhance the stability and predictability of our revenues and cash flows. We also expect that our long-standing customer relationships will lead to repeat business and the renewal of all our short-term contracts. Our assets are modern, efficient, and well maintained: We continually invest in the maintenance and integrity of our assets, including inspection and repair programs to comply with federal regulations. Since 1998, we have inspected approximately 98% of the pipelines HollyFrontier contributed to HEP via "smart-pig" technology, and recent hydro-testing has validated allowable operating pressures. Our assets are operated via satellite communications systems from our control center, where state-of-the-art computers continuously monitor real-time operational data. We have a strategic relationship with HollyFrontier: The substantial majority of our refined product pipelines are directly linked to HollyFrontier's refineries. In 2010, about 87% of the light refined products and crude oil from its Navajo Refinery and 100% from its Woods Cross Refinery were carried or terminalled through our assets. HollyFrontier and its affiliates own a 2% general partner and a 32% limited partner interest in us and the incentive distribution rights. We are contractually bound to HollyFrontier's growth initiatives:We have benefited from HollyFrontier's past refinery expansion initiatives. As HollyFrontier further expands its refineries, the additional production will likely be transported, stored, and distributed through our pipelines and terminals. Our omnibus agreement with HollyFrontier grants us an opportunity to acquire certain types of transportation and distribution assets that are part of any acquisition it makes. Our financial flexibility allows us to pursue growth opportunities: We have a $275 million credit agreement, available for general partnership purposes such as capital expenditures and acquisitions. Along with our ability to issue new partnership units, we have significant resources to finance expansion and acquisitions. We have an experienced management team with a proven track record: We benefit from the vast experience and long-standing industry relationships of our management team. Our senior management has run HollyFrontier's pipeline and terminals business for many years and brings many years of energy industry experience to Holly Energy Partners. Page last updated: 7/1/11 |
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Did You Know? Although Samuel Van Syckel may not have realized it, his two 1865 pipelines helped end the use of wooden oil barrels. They eventually disappeared from sight in the oil region, made extinct by the pipelines, railway tank cars of 1865, and bulk boats. More... |
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