Plains All American and Holly Energy to form a 50/50 joint venture
Category: #energy-and-environment  By Saipriya Iyer  Date: 2019-10-05
  • share
  • Twitter
  • Facebook
  • LinkedIn
Plains All American and Holly Energy to form a 50/50 joint venture

Oil transportation and services related to the maintenance and storage have always been witnessing a substantial business growth owing to growing consumption. Increasing oil demands have laid down the foundation of growth for oil transportation and pipeline companies. To meet customer demands, the oil transportation industry is witnessing several acquisitions and collaborations globally.

Holly Energy Partners, an American petroleum product and oil transportation firm headquartered in Dallas, Texas, and Plains All American Pipeline, a renowned oil pipeline transportation and storage firm headquartered in Houston, Texas, announced the formation of a 50/50 JV, launching Cushing Connect Pipeline and Terminal LLC.

The joint venture is made for two prime reasons, first, the construction and development of a new crude oil pipeline carrying 160,000 barrel per day. This pipeline would link the Cushing, Oklahoma crude oil center to the Tulsa, Oklahoma refining complex that is owned by a subsidiary of HollyFrontier Corporation. Second, the operation and ownership of 1.5 million barrels of storage of crude oil at Cushing, Oklahoma.   

The JV Terminal is predicted to be in operation in 2020, during the second quarter, while the Pipeline is projected to be in operation during first quarter of 2021. Long-term commercial contracts have been signed to support the JV assets.

The total investment for the project would be shared between the partners and that it is estimated to be approximately $130 million, which also includes the existing JV Terminal that is contributed by Plains All American and is valued at approx. $40 million.

The new JV is expected to produce a primary annual EBITDA multiple of approx. 8x to 9x after the JV Pipeline and Terminal are positioned into Joint Venture service.

Executive Vice President for Commercial at Plains All American, Jeremy Goebel stated that this win-win JV aligns with the company’s strategy of enhancing existing assets to offer value-chain solutions for long-term business partners in a very capital efficient manner.

Chief Executive Officer of the general partner of Holly Energy Partners, George Damiris stated that the new JV would offer growth to HEP through insourcing logistics expenditure and provide the ability to supply entire HFC’s Tulsa Refinery crude oil throughput.

Source credit: https://www.rigzone.com/news/holly_energy_plains_all_american_launch_cushing_connect_jv-03-oct-2019-159972-article/

  • share
  • Twitter
  • Facebook
  • LinkedIn

About Author

Saipriya Iyer

Saipriya Iyer    

Saipriya Iyer currently works as a content developer for GroundAlerts. A computer engineer by profession, she ventured into the field of writing for the love of playing with words. Having had previous experience of 3 years under her belt, she has dabbled with website ...

Read More >>

More News By Saipriya Iyer

Chubb launches new Chubb Studio platform for its partners and clients
Chubb launches new Chubb Studio platform for its partners and clients
By Saipriya Iyer

Chubb, a renowned leading insurance provider, has reportedly announced the launch of Chubb Studio, a new platform that would streamline and simplify the circulation of its insurance products from its partners’ digital channels spread across the...

Omega Geracao acquires 50% wind portfolio of EDF Renewables in Brazil
Omega Geracao acquires 50% wind portfolio of EDF Renewables in Brazil
By Saipriya Iyer

Omega Geracao, a renowned Brazil-based power company, has reportedly announced that it has signed a definitive agreement to procure a 50% stake in French renewables company EDF Renewables’ wind farms located in Bahia, Brazil. The wind turbines...

Zoom soon to arrive on Facebook, Amazon, and Google smart displays
Zoom soon to arrive on Facebook, Amazon, and Google smart displays
By Saipriya Iyer

Zoom, a California-based video communications technology company, has reportedly announced that the app would soon be available on Amazon, Google smart display, and Facebook. The company further stated that it would make their initial entrance onto F...