Holly Energy Partners (HEP) 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 the company’s existing crude oil trunk lines from 35,000 bpd to 60,000 bpd. This 35-mile pipeline transports crude oil from HEP’s lease gathering system in southeast New Mexico to the HollyFrontier Corporation New Mexico refining facilities. The scope of the project includes 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-inch petroleum products pipeline owned by HEP. Once in service this pipeline would be capable of transporting up to 35,000 bpd of crude from the Delaware Basin production in the Carlsbad, NM 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. The scope of this project is in the process of being finalized. It is anticipated that this project, subject to receipt of acceptable shipper support and board approval, could also be completed in the first half of 2012.
The cost of these two projects is estimated at $15 million.