Holly Energy Partners, L.P., operators of a refinery in Tulsa and other states reported a fourth quarter drop in net income.
The Dallas company said net income for the quarter was $45.6b million or 43 cents a basic and diluted limited partner unit compared to $51.3 million and 49 cents a year earlier.
What happened? The company said its revenues were $118.5 million, a decline of $9 million compared to the fourth quarter of 2020. It blamed the decrease as a result of converting its HollyFrontier Cheyenne refinery to renewable diesel production. The company also pointed to lower volumes on its product pipelines servicing HollyFrontier’s Navajo refinery due to unplanned maintenance issues.
Distributable cash flow was $63.1 million for the quarter, a decrease of $6.9 million, or 9.9%, compared to the fourth quarter of 2020. HEP declared a quarterly cash distribution of $0.35 on January 21, 2022.
- Revenues from HEP’s crude pipelines were $30.7 million, a decrease of $1.3 million, on shipments averaging 455.0 mbpd compared to 410.4 mbpd for the fourth quarter of 2020. The increase in volumes was mainly attributable to its Cushing Connect Pipeline in Oklahoma which went into service at the end of the third quarter of 2021. Revenues did not increase in proportion to volumes due to recognizing most of the Cushing Connect Pipeline tariffs as interest income under sales-type lease accounting.
- Revenues from our refined product pipelines were $22.7 million, a decrease of $5.9 million, on shipments averaging 135.2 thousand barrels per day (“mbpd”) compared to 155.8 mbpd for the fourth quarter of 2020.
- Revenues from its intermediate pipelines were $7.5 million, consistent with the fourth quarter of 2020. Shipments averaged 105.5 mbpd compared to 134.8 mbpd for the fourth quarter of 2020.
- Revenues from refinery processing units were $23.7 million, an increase of $3.2 million compared to the fourth quarter of 2020, and throughputs averaged 68.8 mbpd compared to 63.9 mbpd for the fourth quarter of 2020.
The company said the impact of the COVID-19 pandemic continues to affect its operations as a result of demand for petroleum products. But HEP also stated it is seeing slight improvements.
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