Holly Energy Partners took full ownership Tuesday of two pipelines supplying crude oil to refineries in Salt Lake City, Utah, CEO George Damiris said.
Damiris, speaking on the midstream MLP's Q3 earnings and results call, said the previously announced acquisitions of the Salt Lake City and the Frontier pipelines closed Tuesday.
Damiris said the two pipelines had "expansion capability" to move more crude from Canada and Casper, Wyoming, to Salt Lake City refiners to replace declining production of local waxy Uinta crude.
Utah has five refineries with about 186,000 b/d of crude oil processing capacity. Output of local Uinta crude has been declining since it peaked in 2015 as declining global oil prices made drilling it uneconomic due to inhospitable Rocky Mountain terrain and the waxy quality of the crude.
However, so far in 2017, Uinta crude production is averaging about 75,343 b/d, up from 2016's yearly average of 71,479 b/d, according to Utah's Department of Natural Resources.
Frontier is a 72,000 b/d pipeline which carries crude from Casper, Wyoming, to Frontier Station, Utah. It supplies Frontier Canadian and Rocky Mountain crudes to Salt Lake City area refiners through a connection to the SLC Pipelines.
The Salt Lake City pipeline is a 95-mile crude oil pipeline serving refineries in the Salt Lake City area.
Holly Energy Partners acquired from partner Plains All American the remaining 50% of Frontier and 75% of SLC for an undisclosed amount. The deal was announced in August.
Holly Energy Partners is the sponsored master limited partnership of US refiner, HollyFrontier.
