The formation of a 50/50 joint venture for Cushing Connect Pipeline & Terminal LLC was announced by Holly Energy Partners, L.P. and Plains All American Pipeline.
Development and construction of a new 160,000 barrels per day crude oil pipeline will be done by the joint venture. The pipeline will connect the Cushing, Oklahoma crude oil hub to the Tulsa, Oklahoma refining complex and is expected to be in service during the first quarter of 2021.
The joint venture will also own and operate the 1.5 million bbls of crude oil storage terminal in Cushing, Oklahoma which is expected to be in service during the second quarter of 2020.
“The new Joint Venture will provide growth to HEP by insourcing logistics spend and provide the capability to supply 100% of HFC’s Tulsa Refinery crude throughput,” commented George Damiris, Chief Executive Officer of the general partner of Holly Energy Partners. “Our partnership with Plains generates HEP growth while providing HFC long-term control of a strategic asset.”
“This win-win Joint Venture aligns with our strategy of optimising existing assets to provide value-chain solutions for long-term industry partners in a capital efficient manner,” stated Jeremy Goebel, Executive Vice President – Commercial, Plains All American. “This investment expands our relationship with a key operational hub service customer and provides additional long-term alignment on movements to the Tulsa refinery.”
An affiliate of Holly Energy Partners will be given the contract to manage the construction and operation of the pipeline. Also an affiliate of Plains will manage the operation of the crude oil storage terminal in Cushing, Oklahoma.