Dallas, Texas-headquartered Holly Corporation has sold a portion of its crude oil petroleum storage and certain refinery-related crude oil pipeline receiving facilities to Plains All American Pipeline.
The purchase from Hollys Tulsa refinery amounted to $40 million (26.6 million), which was paid in cash.
Holly will however pay Plains a set amount per month for the exclusive use of the approximate 400,000 barrels of crude oil tankage Plains acquired as well as a fee for crude oil received by Holly through the crude oil pipeline receiving facilities purchased by Plains. Holly will maintain ownership of the remaining 2.8 million barrels of intermediate and finished petroleum product tankage that was acquired as part of Holly's Tulsa refinery acquisition from Sunoco in June 2009.
In conjunction with the transaction, Holly and Plains have also contractually agreed to explore the use of Holly and Plains Tulsa storage facilities to capture crude oil contango profit opportunities that may arise given the facilities close proximity to Cushing, Oklahoma.
In agreement to a margin sharing agreement, Holly and Plains would equally share contango profits for crude oil purchased by Plains and delivered to the Tulsa facility for storage.
Holly Corporation is an independent petroleum refiner and marketer which produces petrol, diesel fuel and jet fuel and specialty lubricants.
A subsidiary of Holly owns an approximate 41% interest in Holly Energy Partners, owns or leases approximately 2,700 miles of petroleum product and crude oil pipelines in Texas, New Mexico, Utah and Oklahoma and tankage and refined product terminals in several Southwest and Rocky Mountain states.