Oil refiner Holly Corp. and pipeline operator Holly Energy Partners LP said Monday they will build a $300 million refined products pipeline with Sinclair Transportation Co.
The UNEV pipeline, which will be operated by Holly Energy, will run from Salt Lake City to Las Vegas, with terminal facilities in the Cedar City, Utah and North Las Vegas areas.
Holly Energy Partners holds a 180-day option to purchase Holly Corp.'s 75 percent stake in the project, starting upon the pipeline's completion at the end of next year. The purchase price would equal Holly Corp.'s share of the costs plus interest of 7 percent per year.
Sinclair will own a 25 percent interest in the project.
The 12-inch pipeline system will have an initial capacity of 62,000 barrels per day, with possible expansion to 120,000 barrels per day.
The UNEV Pipeline will be a common carrier system that will offer Salt Lake City-area refiners, as well as shippers into Salt Lake City on the Pioneer Pipeline, the ability to transport refined products to Las Vegas and southwest Utah.
"Salt Lake City, Las Vegas and several of the cities in Southern Utah are among the fastest growing communities in the United States with increasing energy demands," said Matthew P. Clifton, Chairman and CEO of Holly. "Las Vegas for the first time will have a diversified source of refined petroleum products to meet its growing demand, rather than depending solely on refined products from Southern California."
Holly Corp. owns a 45 percent in Holly Energy Partners LP.
Questions or comments about this story should be directed to the Financial News desk of The Associated Press at 212-621-7190.
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