Holly Energy Partners (HEP) and Plains All American Pipeline (Plains) have formed a 50/50 joint venture, Cushing Connect Pipeline & Terminal LLC, for the development and construction of a new 160,000 barrel per day common carrier crude oil pipeline, and the ownership and operation of 1.5 million barrels of crude oil storage in Cushing, Oklahoma.
The pipeline will connect the Cushing, Oklahoma crude oil hub to the Tulsa, Oklahoma refining complex owned by a subsidiary of HollyFrontier Corporation.
The JV Terminal is expected to be in service during the second quarter of 2020, and the Pipeline is expected to be in service during the first quarter of 2021. Long-term commercial agreements have been entered into to support the Joint Venture assets.
The Joint Venture will contract with an affiliate of HEP to manage the construction and operation of the Pipeline and with an affiliate of Plains to manage the operation of the JV Terminal. The total Joint Venture investment will be shared proportionately among the partners and is estimated to total approximately $130 million, including the existing JV Terminal contributed by Plains valued at approximately $40 million. The Joint Venture is expected to generate an initial annual EBITDA multiple of approximately 8x to 9x once the JV Terminal and Pipeline are placed into Joint Venture service.
For more information visit www.hollyenergy.com, www.plainsallamerican.com
