HollyFrontier 2014 Annual Report Download - page 20

Download and view the complete annual report

Please find page 20 of the 2014 HollyFrontier annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 122

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122

Table of Content
12
The Artesia facility is operated in conjunction with a refining facility located in Lovington, New Mexico, approximately 65 miles
east of Artesia. The principal equipment at the Lovington facility consists of a crude distillation unit and associated vacuum
distillation units that were constructed after 1970. Supporting Infrastructure includes 1.1 million barrels of feedstock and product
tankage of which 0.2 million barrels of tankage are owned by HEP. The Lovington facility processes crude oil into intermediate
products that are transported to Artesia by means of three intermediate pipelines owned by HEP. These products are then upgraded
into finished products at the Artesia facility. The combined crude oil capacity of the Navajo Refinery facilities is 100,000 BPSD
and it typically processes or blends an additional 10,000 BPSD of natural gasoline, butane, gas oil and naphtha.
Markets and Competition
The Navajo Refinery primarily serves the southwestern United States market, which has historically experienced a high-growth
rate, including the metropolitan areas of El Paso, Texas; Albuquerque, Moriarty and Bloomfield, New Mexico; Phoenix and Tucson,
Arizona; and portions of northern Mexico. Our products are shipped through HEP's pipelines from Artesia, New Mexico to El
Paso, Texas and from El Paso to Albuquerque and to Mexico via products pipeline systems owned by Magellan and from El Paso
to Tucson and Phoenix via a products pipeline system owned by Kinder Morgan's subsidiary, SFPP, L.P. (“SFPP”). In addition,
petroleum products from the Navajo Refinery are transported to markets in northwest New Mexico, to Moriarty, New Mexico,
near Albuquerque, via HEP's pipelines running from Artesia to San Juan County, New Mexico, and to Bloomfield, New Mexico.
We have refined product storage through our pipelines and terminals agreement with HEP at terminals in El Paso, Texas; Tucson,
Arizona; and Artesia and Moriarty, New Mexico.
El Paso Market
The El Paso market for refined products is currently supplied by a number of area and Gulf Coast refiners and pipelines. Area
refiners include Navajo, WRB Refining, LLC (“WRB”) (a joint venture between Phillips 66 and Cenovus Energy), Valero, Alon
and Western Refining. Pipelines serving this market are owned by Magellan, NuStar Energy L.P. and HEP. Refined products from
the Gulf Coast are transported via Magellan pipelines.
Arizona Market
The Arizona market for refined products is currently supplied by a number of refiners via pipelines and trucks. Refiners include
companies located in west Texas, eastern New Mexico, northern New Mexico, the Gulf Coast and the West Coast. Magellan's
pipeline systems deliver refined products from the Texas Gulf Coast to El Paso and, through interconnections with third-party
common carrier pipelines, into the Arizona market.
New Mexico Markets
The Artesia, Albuquerque, Moriarty and Bloomfield markets are supplied by a number of refiners via pipelines and trucks. Refiners
include Navajo, Valero, Western Refining, Alon and WRB.
We use a common carrier pipeline out of El Paso to serve the Albuquerque market. In addition, HEP leases from Mid-America
Pipeline Company, L.L.C., a pipeline between White Lakes, New Mexico and the Albuquerque vicinity and Bloomfield, New
Mexico. The lease agreement currently runs through 2017, and HEP has options to renew for two additional ten-year periods. HEP
owns and operates a 12-inch pipeline from the Navajo Refinery to the leased pipeline as well as terminalling facilities in Moriarty,
which is 40 miles east of Albuquerque. This facility permits us to ship light products to the Albuquerque and Santa Fe, New Mexico
areas. In addition, we serve southern Colorado and northern Arizona primarily out of a terminal in Bloomfield, New Mexico,
which is owned by Western Refining.
Principal Products
Set forth below is information regarding the principal products produced at our Navajo Refinery:
Years Ended December 31,
2014 2013 2012
Southwest Region (Navajo Refinery)
Sales of produced refined products:
Gasolines 54% 51% 51%
Diesel fuels 38% 39% 38%
Fuel oil 4% 6% 6%
Asphalt 1% 1% 2%
LPG and other 3% 3% 3%
Total 100% 100% 100%