HollyFrontier 2015 Annual Report Download - page 22

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Table of Content
14
We have signed a 10-year, 20,000 BPD crude oil supply agreement with Newfield Exploration Company. This agreement will
supply black and yellow wax crude oil produced in the nearby Uinta Basin to the Woods Cross Refinery. Upon completion of the
expansion, the Woods Cross Refinery's capacity to process waxy crude is expected to double to approximately 24,000 BPD.
Markets and Competition
The Cheyenne Refinery primarily markets its products in eastern Colorado, including metropolitan Denver, eastern Wyoming and
western Nebraska. Because of the location of the Cheyenne Refinery, we are able to sell a significant portion of its diesel directly
from the truck rack at the refinery, therefore, eliminating transportation costs. The Cheyenne Refinery ships refined products via
the Magellan pipeline serving Denver and Colorado Springs, Colorado.
Denver Market
The most competitive market for the Cheyenne Refinery is the Denver metropolitan area. Three other refineries supply the Denver
market: Wyoming refineries near Rawlins and in Casper owned by Sinclair and a refinery in Denver owned by Suncor. Five product
pipelines also supply Denver, including three from outside the region.
Utah Market
The Woods Cross Refinery's primary market is Utah, which is currently supplied by a number of local refiners and the Pioneer
Pipeline. In addition to our Woods Cross Refinery, local area refiners include Chevron, Tesoro, Big West and Silver Eagle. Other
refiners that ship into the Woods Cross market via the Pioneer Pipeline include Sinclair, ExxonMobil, CHS and Phillips 66. We
estimate the four local refineries that compete with our Woods Cross Refinery have a combined capacity to process approximately
150,000 BPD of crude oil. The five Utah refineries collectively supply an estimated 70% of the gasoline and distillate products
consumed in the states of Utah and Idaho, with the remainder imported from refineries in Wyoming and Montana via the Pioneer
Pipeline owned jointly by Sinclair and Phillips 66. Approximately 40% - 45% of the gasoline and diesel fuel produced by our
Woods Cross Refinery is sold through a network of Phillips 66 branded marketers under a long-term supply agreement.
Idaho, Wyoming, Eastern Washington and Nevada Markets
We supply a small percentage of the refined products consumed in the combined Idaho, Wyoming, eastern Washington and Nevada
markets. Our Woods Cross Refinery ships refined products over a common carrier pipeline system owned by Tesoro Logistics
Northwest Pipelines LLC (“Tesoro Logistics”) to numerous terminals, including HEP's terminal at Spokane, Washington and to
terminals at Pocatello and Boise, Idaho and Pasco, Washington that are owned by Tesoro Logistics. We sell to branded and
unbranded customers in these markets. In 2012, we began shipping refined products to Cedar City, Utah and Las Vegas, Nevada
via the UNEV Pipeline. The majority of the Las Vegas, Nevada market for refined products is supplied by various West Coast
refiners and suppliers via Kinder Morgan's CalNev common carrier pipeline system.
Principal Products
Set forth below is information regarding the principal products produced at our Cheyenne and Woods Cross Refineries:
Years Ended December 31,
2015 2014 2013
Rocky Mountain Region (Cheyenne and Woods Cross Refineries)
Sales of produced refined products:
Gasolines 57% 56% 56%
Diesel fuels 36% 33% 30%
Jet fuels —% —% 1%
Fuel oil 3% 1% 1%
Asphalt 2% 5% 5%
LPG and other 2% 5% 7%
Total 100% 100% 100%
Crude Oil and Feedstock Supplies
Crude oil is transported to the Cheyenne Refinery from suppliers in Canada, Colorado, Nebraska, North Dakota and Montana via
common carrier pipelines owned by Spectra, Plains and Suncor Energy, as well as by truck. The Woods Cross Refinery currently
obtains crude oil from suppliers in Canada, Wyoming, Utah and Colorado as delivered via common carrier pipelines that originate
in Canada, Wyoming and Colorado. We also receive crude oil via the SLC Pipeline, a joint venture common carrier pipeline in
which HEP owns a 25% interest. Supplies of black wax crude oil are shipped via truck.