Holly Energy Partners Announces Preliminary Assessment of Proposed New Pipelines

  Holly Energy Partners Announces Preliminary Assessment of Proposed New
  Pipelines

Business Wire

DALLAS -- December 18, 2012

Holly Energy Partners (NYSE: HEP) announced today that it has engaged URS
Corporation to perform preliminary engineering, routing and cost estimates for
two proposed new pipelines.

The first proposed pipeline would be a new 20-inch intrastate crude oil
pipeline between Cushing, Oklahoma and the Tulsa, Oklahoma refinery complex
owned by Holly Refining & Marketing – Tulsa LLC (“HRM Tulsa”), a subsidiary of
HollyFrontier Corporation. The 50-mile line would provide safe and reliable
transport of Cushing sourced domestic and Canadian crude oil to HRM Tulsa’s
125,000 BPD facility. The pipeline would allow for a significant portion of
crude oil transported to be heavy Canadian and sour crude oil. Crude oil
processed at HRM Tulsa’s facility is currently transported on pipelines owned
by Sunoco Logistics and Magellan Pipeline Company.

The second proposed pipeline would be a new 100-mile, 8-inch interstate
petroleum products pipeline between the Cheyenne, Wyoming refinery owned by
Frontier Refining LLC, a subsidiary of HollyFrontier Corporation, and Denver,
Colorado. The Frontier Refining 52,000 BPD refinery, with its ability to
process up to 35,000 BPD of heavy Canadian crude and its close proximity to
growing domestic crude production, is a significant supplier of petroleum
products to the Denver market. The project will also evaluate the construction
of a new petroleum products terminal in North Denver or, alternatively, the
routing of the new pipeline to existing third-party product terminals in the
Denver area. This infrastructure addition would ensure safe and reliable
transport of petroleum products from Frontier Refining’s location-advantaged
refinery to its largest market. Petroleum products produced at Frontier
Refining’s Cheyenne, Wyoming refinery are currently transported to Denver on
the Rocky Mountain Pipeline’s products line owned by Plains All-American.

HEP anticipates that it will be in a position to decide whether to proceed
with these projects in the second quarter of 2013 when preliminary engineering
and detailed project cost estimates are completed and if necessary shipper
commitments can be secured.

About Holly Energy Partners, L.P.:

Holly Energy Partners, L.P., headquartered in Dallas, Texas, provides
petroleum product and crude oil transportation, tankage and terminal services
to the petroleum industry, including HollyFrontier Corporation, which
currently owns a 44% interest (including a 2% general partner interest) in
Holly Energy. Holly Energy owns and operates petroleum product and crude
pipelines, tankage, terminals and loading facilities located in Texas, New
Mexico, Arizona, Oklahoma, Washington, Idaho, Utah, Kansas and Wyoming. In
addition, Holly Energy owns a 25% interest in SLC Pipeline LLC, a transporter
of crude oil in the Salt Lake City area, and a 75% interest in UNEV Pipeline,
LLC, the owner of a Holly Energy operated refined products pipeline running
from Utah to Las Vegas, Nevada and related product terminals.

Information about Holly Energy Partners, L.P. may be found on its website at
http://www.hollyenergy.com.

The following is a “safe harbor” statement under the Private Securities
Litigation Reform Act of 1995: The statements in this press release relating
to matters that are not historical facts are “forward-looking statements”
within the meaning of the federal securities laws. Forward-looking statements
use words such as “anticipate,” “project,” “expect,” “plan,” “goal,”
“forecast,” “will,” “intend,” “could,” “believe,” “may,” and similar
expressions and statements regarding our plans and objectives for future
operations. These statements are based on our beliefs and assumptions and
those of Holly Energy’s general partner using currently available information
and expectations as of the date hereof, are not guarantees of future
performance and involve certain risks and uncertainties. Although we and Holly
Energy’s general partner believe that such expectations reflected in such
forward-looking statements are reasonable, neither we nor Holly Energy’s
general partner can give assurance that our expectations will prove to be
correct. Such statements are subject to a variety of risks, uncertainties and
assumptions. If one or more of these risks or uncertainties materialize, or if
underlying assumptions prove incorrect, our actual results may vary materially
from those anticipated, estimated, projected or expected. Certain factors
could cause actual results to differ materially from results anticipated in
the forward-looking statements. These factors include, but are not limited to:

  *risks and uncertainties with respect to the actual quantities of petroleum
    products and crude oil shipped on Holly Energy’s pipelines and/or
    terminalled in Holly Energy’s terminals;
  *the economic viability of HollyFrontier Corporation, Alon USA, Inc. and
    Holly Energy’s other customers;
  *the demand for refined petroleum products in markets HollyFrontier and
    Holly Energy serve;
  *HollyFrontier’s and Holly Energy’s ability to successfully purchase and
    integrate additional operations in the future;
  *HollyFrontier’s and Holly Energy’s ability to complete previously
    announced or contemplated acquisitions;
  *the availability and cost of additional debt and equity financing;
  *the possibility of reductions in production or shutdowns at HollyFrontier
    refineries, including refineries utilizing Holly Energy’s pipeline and
    terminal facilities;
  *the effects of current and future government regulations and policies;
  *HollyFrontier’s and Holly Energy’s operational efficiency in carrying out
    routine operations and capital construction projects;
  *the possibility of terrorist attacks and the consequences of any such
    attacks;
  *general economic conditions; and
  *other financial, operational and legal risks and uncertainties detailed
    from time to time in HollyFrontier’s and Holly Energy’s Securities and
    Exchange Commission filings.

The forward-looking statements speak only as of the date made and, other than
as required by law, we undertake no obligation to publicly update or revise
any forward-looking statements, whether as a result of new information, future
events or otherwise.

Contact:

Holly Energy Partners
Investor Relations
Neale Hickerson, 214-954-6511
or
Julia Heidenreich, 214-954-6511
 
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