* Company to up crude capacity from Delaware basin
* One pipeline to go to HollyFrontier NM refinery
NEW YORK, July 26 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.