HollyFrontier Enjoys Petroleum Demand Revival, Puts Muscle into Renewable Diesel

Researched by Industrial Info Resources (Sugar Land, Texas)--Strong refining margins, particularly in the central and western U.S., bolstered HollyFrontier Corporation (NYSE:HFC) (Dallas, Texas) in the second quarter as it rode a wave of refined-product demand while broadening its role in the renewable diesel market. Pending stockholder and regulatory approvals, the company plans to acquire the refining and pipeline arm of one of its competitors and form a new company, HF Sinclair Corporation, by mid-2022. Industrial Info is tracking $1.35 billion worth of active projects from HollyFrontier, more than half of which is attributed to projects under construction.

Click on the image at right for a graph detailing HollyFrontier's active projects, by project type.

HollyFrontier's efforts to grab a share of the renewable-diesel market are led by its multi-phase addition of a renewable diesel unit (RDU) at its Navajo Refinery in Artesia, New Mexico. The new unit, which began construction in March, will convert pretreated soybean oil, vegetable oil and tallow into renewable hydrogenated diesel. Related projects underway, as tracked by Industrial Info's Global Market Intelligence (GMI) Petroleum Refining Project Database, include:

• a $280 million renewable diesel hydrotreating unit; see project report
• a $200 million renewable diesel pretreatment unit; see project report
• a $45 million addition of six storage tanks; see project report
• a $25 million addition of a loading/unloading railcar rack; see project report

HollyFrontier also is at work on a $150 million conversion of a hydrotreater at its refinery in Cheyenne, Wyoming, into a renewable diesel unit. The former 52,000-barrel-per-day refinery ran its last barrel of crude one year ago; as part of the conversion, the company is retrofitting the 16,000-BBL/d diesel hydrofiner into a 6,000-BBL/d renewable diesel hydrotreater. Subscribers can learn more from Industrial Info's detailed project report.

HollyFrontier owns a 57% limited partner interest and a non-economic general partner interest in Holly Energy Partners LP (NYSE:HEP) (Dallas, Texas), a master limited partnership that provides petroleum-product and crude oil transportation and storage services to the petroleum industry, including HollyFrontier's subsidiaries. Holly Energy and partner Plains All American Pipeline (NASDAQ:PAA) (Houston, Texas) are nearing the end of construction on a $90 million crude oil pipeline in Oklahoma, which is designed to carry 160,000 barrels per day (BBL/d) from the Cushing terminal owned by Plains All American to Holly Energy's refining complex in Tulsa. Subscribers can learn more from Industrial Info's project report.

Earlier this week, HollyFrontier and Holly Energy agreed to acquire Sinclair Oil Corporation and Sinclair Transportation Company from The Sinclair Companies (Salt Lake City, Utah). The deal includes Sinclair's renewable diesel business, 1,200 miles of pipelines, eight product terminals, and a pair of refineries in Casper and Sinclair, Wyoming. Sinclair Oil & Gas Company, another Sinclair subsidiary, will retain The Sinclair Companies' exploration and production assets. The deal is expected to close in mid-2022.

Industrial Info is tracking $345 million worth of capital and maintenance-related investments at the Casper and Sinclair refineries. Capital-spending projects under construction at the facilities include a $75 million sulfur-recovery unit replacement at Casper and a $22 million tank farm expansion at Sinclair, both of which are slated to wrap up later this year. Subscribers can learn more from Industrial Info's reports on the Casper and Sinclair projects, or click here for a full list of active projects at the two facilities.

HollyFrontier's sales and other revenues totaled $4.58 billion in the second quarter, compared with $2.06 billion in second-quarter 2020; net income stood at $168.85 million, compared with a $176.68 million loss in the same period last year.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.