Reports related to this article:
Project(s): View 3 related projects in PECWeb
Plant(s): View 3 related plants in PECWeb
en
Researched by Industrial Info Resources (Sugar Land, Texas)--While most U.S. refiners fared well in fourth-quarter 2021, the stars weren't quite so aligned for HollyFrontier Corporation (NYSE:HFC) (Dallas, Texas). The company narrowed its fourth-quarter 2021 net loss to $39.5 million from a loss of $117.7 million in fourth-quarter 2020, but it was still in the red, largely due to unplanned outages and weather events. Nevertheless, the refiner is looking toward a more profitable and greener future as it focuses on renewable diesel projects and sees major acquisitions from Sinclair Oil Corporation (Salt Lake City, Utah).
In the just-passed quarter, HollyFrontier closed on the acquisition of the Puget Sound Refinery in Anacortes, Washington, from Shell plc (NYSE:SHEL) (London, England) at the start of November. While HollyFrontier expects the refinery to generate approximately $150 million to $200 million of earnings before interest, taxes, depreciation and amortization (EBITDA), the weather was working against the refinery's earning power in the fourth quarter, when flooding in British Columbia cut crude oil supplies. In addition, severe weather and operating problems also restricted output at refineries in New Mexico and Oklahoma.
The result of these circumstances was lower overall refinery utilization, which dropped to 83.6% in the quarter from 93.8% in the previous year. However, the company saw some upside in higher product demand, which resulted in a consolidated refinery gross margin of $8.70 per produced barrel, compared with $4.02 in the fourth quarter of 2020, resulting in a slightly narrower loss before interest and taxes of $63.5 million for its refining segment, compared with a loss of $66.1 million in the prior-year quarter.
Despite the less-than-stellar results, HollyFrontier remains optimistic about the future. In a company press release, Chief Executive Officer Michael Jennings said, "Looking forward to 2022, we remain constructive on the macro environment and are focused on the execution of our strategic initiatives: the successful completion and start-up of our renewables business, closing on our acquisition of Sinclair and accelerating returns of capital to our shareholders."
The company's renewables business involves two major renewable diesel projects at its refineries in Artesia, New Mexico, and Cheyenne, Wyoming. The project at Artesia involves construction of a 9,000-barrel-per-day (BBL/d) renewable diesel hydrotreating unit along with a pretreatment unit that will prepare the raw soybean and vegetable oils, new storage tanks and a railcar loading/unloading rack addition. Subscribers to Industrial Info's Global Market Intelligence (GMI) Refining Project Database can click here for the detailed reports.
At the Cheyenne Refinery, HollyFrontier is retrofitting an existing unit to provide 6,000 BBL/d of renewable diesel. Subscribers can click here for the project report. Both the Artesia and Cheyenne projects kicked off last year and are expected to be completed this year.
In August last year, HollyFrontier announced that it would pay $2.6 billion for almost all of Sinclair Oil's assets, including new refining, pipeline and storage facilities in the U.S. Rocky Mountains region. As part of the deal, HollyFrontier will buy Sinclair's branded marketing unit, renewable diesel unit and two refineries. Holly Energy Partners (NYSE:HEP), HollyFrontier's transportation business, will buy Sinclair's 1,200 miles of pipeline assets and storage terminals with about 4.5 million barrels of capacity. The deal is expected to close in mid-2022, resulting in the formation of a new company, HF Sinclair Corporation, which will replace HollyFrontier on the stock exchange.
Other projects on HollyFrontier's books this year include the upgrade of the 85,000-BBL/d crude and 32,000-BBL/d vacuum units at the company's Tulsa West Refinery in Oklahoma. The main fractionation columns will be modified and reliability increased. The project is planned to take place in the fourth quarter. Subscribers can click here for the report.
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.
In the just-passed quarter, HollyFrontier closed on the acquisition of the Puget Sound Refinery in Anacortes, Washington, from Shell plc (NYSE:SHEL) (London, England) at the start of November. While HollyFrontier expects the refinery to generate approximately $150 million to $200 million of earnings before interest, taxes, depreciation and amortization (EBITDA), the weather was working against the refinery's earning power in the fourth quarter, when flooding in British Columbia cut crude oil supplies. In addition, severe weather and operating problems also restricted output at refineries in New Mexico and Oklahoma.
The result of these circumstances was lower overall refinery utilization, which dropped to 83.6% in the quarter from 93.8% in the previous year. However, the company saw some upside in higher product demand, which resulted in a consolidated refinery gross margin of $8.70 per produced barrel, compared with $4.02 in the fourth quarter of 2020, resulting in a slightly narrower loss before interest and taxes of $63.5 million for its refining segment, compared with a loss of $66.1 million in the prior-year quarter.
Despite the less-than-stellar results, HollyFrontier remains optimistic about the future. In a company press release, Chief Executive Officer Michael Jennings said, "Looking forward to 2022, we remain constructive on the macro environment and are focused on the execution of our strategic initiatives: the successful completion and start-up of our renewables business, closing on our acquisition of Sinclair and accelerating returns of capital to our shareholders."
The company's renewables business involves two major renewable diesel projects at its refineries in Artesia, New Mexico, and Cheyenne, Wyoming. The project at Artesia involves construction of a 9,000-barrel-per-day (BBL/d) renewable diesel hydrotreating unit along with a pretreatment unit that will prepare the raw soybean and vegetable oils, new storage tanks and a railcar loading/unloading rack addition. Subscribers to Industrial Info's Global Market Intelligence (GMI) Refining Project Database can click here for the detailed reports.
At the Cheyenne Refinery, HollyFrontier is retrofitting an existing unit to provide 6,000 BBL/d of renewable diesel. Subscribers can click here for the project report. Both the Artesia and Cheyenne projects kicked off last year and are expected to be completed this year.
In August last year, HollyFrontier announced that it would pay $2.6 billion for almost all of Sinclair Oil's assets, including new refining, pipeline and storage facilities in the U.S. Rocky Mountains region. As part of the deal, HollyFrontier will buy Sinclair's branded marketing unit, renewable diesel unit and two refineries. Holly Energy Partners (NYSE:HEP), HollyFrontier's transportation business, will buy Sinclair's 1,200 miles of pipeline assets and storage terminals with about 4.5 million barrels of capacity. The deal is expected to close in mid-2022, resulting in the formation of a new company, HF Sinclair Corporation, which will replace HollyFrontier on the stock exchange.
Other projects on HollyFrontier's books this year include the upgrade of the 85,000-BBL/d crude and 32,000-BBL/d vacuum units at the company's Tulsa West Refinery in Oklahoma. The main fractionation columns will be modified and reliability increased. The project is planned to take place in the fourth quarter. Subscribers can click here for the report.
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.
