Holly Energy Partners to expand New Mexico pipelines
* Company to up crude capacity from Delaware basin
* One pipeline to go to HollyFrontier NM refinery
NEW YORK, July 26 (Reuters) - Midstream oil company Holly Energy Partners (HEP.N) is looking at two projects to expand the take-away crude capacity from the Delaware Basin in southeast New Mexico, the company said on Tuesday.
Increased production from onshore U.S. oil fields is growing as the higher price of oil has made several plays, including mature plays like the Delaware Basin more attractive.
The first project will almost double the amount of crude oil carried to HollyFrontier's 105,000 barrel per day Navajo refinery in Artesia, New Mexico.
The capacity of the 35-mile pipeline will rise to 60,000 bpd from 35,000 bpd and is expected to be completed during the first half of 2012.
The second project will "reactivate" a 70-mile, 8-inch petroleum products pipeline and convert it to carry 35,000 bpd of crude from the Delaware Basin to Carlsbad, New Mexico to either a third party pipeline or to HollyFrontier's refinery, the company said.
The project is still in the finalization stage, depending on interest from shippers and approval from the board.
If it is approved, it is expected to also be completed during the first half of next year.
The cost of the two projects is $15 million.
HollyFrontier Corp. (HFC.N) owns 35 percent of Holly Energy Partners, including the two percent general partner interest.