The Dallas firm that owns and operates the oil refinery in Tulsa, Holly Energy Partners, L.P. reported a big jump in net income for the third quarter 2019. It was $82.3 million or 78 cents a share compared to $45 million and 43 cents a share in the third quarter of 2018.
Distributable cash flow was $68.8 million for the quarter, an increase of $2.2 million, or 3.4% compared to the third quarter of 2018. HEP declared a quarterly cash distribution of $0.6725 on 10/17/2019. This distribution remains the same as the $0.6725 paid in the second quarter of 2019.
Net income attributable to HEP for the quarter was $47.2 million ($0.45 per basic and diluted limited partner unit), an increase of $2.2 million compared to the same period of 2018. The increase in net income attributable to HEP was mainly due to strong third-party volumes on our UNEV pipeline, higher spot revenues on our crude oil pipeline systems in Wyoming and Utah and stronger terminal and tank volumes at El Dorado and Tulsa.
Commenting on the 2019 third quarter results, George Damiris, Chief Executive Officer, stated, “HEP had a solid third quarter led by the continued strength in crude transportation across our system. The recently announced Cushing Connect joint venture highlights both our opportunities to grow HEP as well as our strong parent, HollyFrontier.”
Revenues for the third quarter were $135.9 million, an increase of $10.1 million compared to the third quarter of 2018. The increase was mainly attributable to higher volumes on the UNEV pipeline and our crude pipeline systems in Wyoming and Utah, which contributed to an increase in overall pipeline volumes of 8%.
Here’s how revenues were reported in the company’s segments:
- Revenues from refined product pipelines were $32.7 million, an increase of $0.7 million compared to the third quarter of 2018, due to higher throughput and contractual tariff escalators. Shipments averaged 197.1 thousand barrels per day (“mbpd”) compared to 187.1 mbpd for the third quarter of 2018. The volume increase was mainly due to higher volumes on the UNEV pipeline and pipelines servicing HFC’s Navajo refinery.
- Revenues from intermediate pipelines were $7.5 million, an increase of $0.7 million compared to the third quarter of 2018, due to higher throughput and contractual tariff escalators. Shipments averaged 153.5 mbpd for the third quarter of 2019 compared to 148.3 mbpd for the third quarter of 2018. The increase in volumes was mainly due to higher throughputs on our intermediate pipelines servicing HollyFrontier’s Tulsa refinery.
- Revenues from crude pipelines were $33.0 million, an increase of $2.0 million compared to the third quarter of 2018, and shipments averaged 488.1 mbpd compared to 442.1 mbpd for the third quarter of 2018. The increases were mainly attributable to increased volumes on crude pipeline systems in New Mexico and Texas and on crude pipeline systems in Wyoming and Utah, as well as contractual tariff escalators.
- Revenues from terminal, tankage and loading rack fees were $42.5 million, an increase of $6.0 million compared to the third quarter of 2018. Refined products and crude oil terminalled in the facilities averaged 541.6 mbpd compared to 475.1 mbpd for the third quarter of 2018. The revenue and volume increases were mainly due to higher volumes at HFC’s Tulsa and El Dorado refineries, the new Orla diesel rack and the Catoosa, Las Vegas and Spokane terminals.
- Revenues from refinery processing units were $20.3 million, an increase of $0.7 million compared to the third quarter of 2018, and throughputs averaged 75.9 mbpd compared to 65.6 mbpd for the third quarter of 2018. The increase in revenue was mainly due to contractual rate increases.
