Holly Corporation Receives Permits For New Unit And Refinery Expansion

abarrelfullabarrelfull wrote on 17 Dec 2014 14:00
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January 8, 2002

Holly Corporation (AMEX "HOC") announced today that its subsidiary Navajo Refining Company, L.P. has received the necessary permits for the construction of a new Gas Oil Hydrotreating Unit at Navajo's Artesia, New Mexico refining facility and for the expansion of its New Mexico refining capacity.

The Gas Oil Hydrotreater will enable Navajo to expand substantially its capabilities to produce higher-valued California grade gasolines required in its Phoenix market while increasing Navajo's overall percentage yield of gasoline. Navajo will also be positioned to meet the new EPA nationwide low-sulfur clean-burning gasoline standards on all its gasoline production upon the completion of the Gas Oil Hydrotreater in late 2003, which would be over four years ahead of the required date for the Navajo facility.

Contemporaneous with the Hydrotreater project, Navajo will be making necessary modifications to several of the Artesia processing units for the first phase of Navajo's expansion, which will increase crude oil refining capacity from 60,000 to 70,000 barrels per day (BPD). The first phase of the expansion is expected to be completed by the end of 2003. Certain additional permits will be required to implement needed modifications at Navajo's Lovington, New Mexico refining facility which is operated in conjunction with the Artesia facility. It is envisioned that these necessary modifications to the Lovington facility would also be completed by the end of 2003. The permits received by Navajo will also permit a second phase expansion of Navajo's crude oil capacity from 70,000 to 80,000 BPD but a schedule for such additional expansion has not been determined.

Matthew P. Clifton, President of Holly Corporation said,"We are extremely pleased to produce these cleaner-burning gasolines for our New Mexico, Arizona, Texas, Colorado and Utah customers ahead of our regulatory deadlines and, to implement advanced environmental control technology that will put Navajo in the upper tier of low emission refining facilities in the country. This project demonstrates our commitment to grow our clean-burning fuel production capabilities to meet the expanding energy needs of our Southwest markets in a manner that improves air quality at our facility while reducing vehicle tailpipe emissions within the communities we serve. This project is a clear win-win situation that improves air quality, regional energy self-sufficiency, and the profitability of our company."

The cost of the Gas Oil Hydrotreater project will be substantially reduced by using existing Hydrotreater equipment that was purchased from an Illinois refinery and has been relocated to the Navajo Refinery. Because of the use of this equipment, the total cost of the Gas Oil Hydrotreater project and the expansion of the Navajo Refinery to 70,000 BPD is currently estimated to be approximately $48 million, including approximately $15 million that has already been spent on engineering and the purchase and relocation of equipment.

The first phase of the Navajo Refinery expansion project will increase Holly Corporation's total crude oil refining capacity by approximately 15%, from 67,000 BPD to 77,000 BPD.

Holly Corporation, through its affiliates, Navajo Refining Company and Montana Refining Company, is engaged in the refining, transportation, terminalling and wholesale marketing of petroleum products.


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