American Oil and Gas Reporter - PBIOS 2014 Official Program Guide - 153

Building New Connections
Holly Frontier own five refineries in
the Southwest, Rockies and Midwest, including the 100,000 bbl/d Navajo refinery
in Artesia, N.M., which is operated in
conjunction with a smaller facility 65
miles east in Lovington, N.M. The Navajo
refinery processes a sour and heavy crude
oil slate that is delivered to Artesia from
local gathering systems and through a
southbound loop to the Oxy Centurion
pipeline from Cushing.
That Centurion pipeline loop has delivered Canadian heavy crude to Artesia
from Cushing since 2010. However, Holly
Frontier has been processing more locally
sourced sour crudes from the Permian.
Holly Frontier's pipeline and terminal
assets are owned by subsidiary, Holly
Energy Partners (HEP). The company is
in the process of upgrading and expanding
the HEP crude gathering system in New
Mexico to provide additional supplies to
Artesia from West Texas and New Mexico
sour production.
The HEP gathering system expansion
involves adding 40 miles of new pipeline
to the southwestern New Mexico network
and bringing 65 miles of previously idled
pipe back into service. Crude gathering
capacity will increase from 30,000 to
100,000 bbl/d, enabling HEP to deliver
crude to other markets besides the Artesia
refinery. To that end, the new pipeline
includes a connection between an HEP
terminal at Bisti, N.M., and Midland,
from where crude can be shipped on

third-party lines to Cushing or Gulf Coast
destinations. HEP says that phases of
this project are on line already, and full
completion of the expanded system was
anticipated by the end of summer.
With Permian crude production going
gangbusters, the crude take-away system
is constrained as producers wait for new
pipelines to come on line directed to the
Gulf Coast. Crude prices are being discounted as a result, but not enough to
justify large-scale shipments by rail. However, that congestion will be relieved as
the new BridgeTex pipeline comes on
line. Within the Permian Basin, a more

immediate challenge for midstream players
is to build gathering systems to get crude
from new production centers to the origin
of take-away pipelines out of the region.
A couple regional refiners are taking advantage of booming local production to
build crude gathering systems to serve
their own refineries and ship excess supplies to outside markets.
Continued expansion and new-build
infrastructure can be expected as Permian
production blows past previous record
oil production highs to climb toward 2.5
million bbl/d by 2019.
r

SANDY
FIELDEN

Sandy Fielden is managing director
of energy analytics at RBN Energy
LLC. With 25 years of management
and communication experience in the
European and North American energy
industries, he previously held positions
as vice president of data services at
Allegro, vice president of energy products and services at LIM (now Morningstar Commodity Data), and product
manager at Saladin. Fielden began
his career at Fina in the United Kingdom, where he was involved in all aspects of the company's downstream
operation as a business analyst.
OCTOBER PBIOS 2014 153

American Oil and Gas Reporter - PBIOS 2014 Official Program Guide

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