Plains Buys Holly Assets

• By Zacks Equity Research
• On 11:45 am EDT, Wednesday October 21, 2009

Plains All American Pipeline L.P. (NYSE: PAA - News) yesterday announced the acquisition of certain pipelines, a manifold system and approximately 400,000 barrels of crude oil storage capacity from Holly Corporation (NYSE: HOC - News) for $40 million. The deal includes 6 tanks, 9 receiving pipelines and related assets and contract rights located at or associated with Holly’s Tulsa, Oklahoma refinery. 

Apart from the sale, the companies entered into a tank lease and throughput agreement, allowing Holly to use the acquired tankage for a monthly payment and pipelines for a fee. Holly will maintain ownership of the remaining 2.8 million barrels of intermediate and finished petroleum product tankage that was acquired as part of Holly's Tulsa refinery acquisition from Sunoco in June 2009. 

Plains and Holly have also agreed to work together to identify and capture contango storage opportunities. 

Plains All American Pipeline L.P. is a publicly traded master limited partnership engaged in the transportation, storage, terminalling and marketing of crude oil, refined products and liquefied petroleum gas as well as other natural gas related petroleum products. The partnership is also engaged in the development and operation of natural gas storage facilities. 

Holly Corporation is an independent petroleum refiner and marketer producing high value light products such as gasoline, diesel fuel, jet fuel and high value specialty lubricants.

Zacks Investment Research

Buzz up!