Delek US Announces Improved Crude Oil Sourcing Flexibility and Provides Update on Tyler Turnaround and Expansion
Delek US Holdings Inc. (NYSE: DK) (“Delek US”) announced that two new
crude oil pipeline development projects are expected to improve its
sourcing flexibility and its Tyler, Texas refinery has completed the
turnaround and expansion project, and has begun the restart process.
Crude Oil Pipeline Projects
Delek US, through wholly owned subsidiaries, expects to be an anchor
shipper on the following pipelines upon successful completion of each
project.
Caddo Pipeline – This 80,000 barrel per day
pipeline project will be a 50/50 joint venture with a subsidiary of
Plains All American Pipeline, L.P. (NYSE: PAA) (“Plains”) and Delek
Logistics Partners, LP (NYSE: DKL) ("Delek Logistics"). It will be a
12-inch, 80-mile crude oil pipeline originating in Longview, Texas with
destinations in the Shreveport, Louisiana area. Completion is expected
in mid-2016 and through connections in the Shreveport area this pipeline
will be able to deliver crude to Delek US’ El Dorado, Arkansas refinery.
Plains will build and operate this pipeline on behalf of the joint
venture.
RIO Pipeline (Delaware Basin to Midland Pipeline
Project) – This 55,000 barrel per day pipeline project will be
developed by Rangeland Energy, and Delek Logistics will be a 33 percent
participant. Completion of this project is expected in the first half of
2016. It consists of a 12-inch, 107-mile pipeline originating in north
Loving County, Texas near the Texas-New Mexico border and terminating in
Midland, Texas. This pipeline will have the capability to expand to
85,000 barrels per day or more with additional capital investments.
Through connections in Midland, Texas, this project will deliver crude
to take-away pipelines located in the Midland area. Rangeland will build
and operate these assets on behalf of the joint venture.
Tyler Refinery Update
The Tyler refinery turnaround has been completed and the refinery is now
in the restart process. It is expected to return to normal operations
over the next week. During the turnaround, the final work to expand the
nameplate capacity to 75,000 barrels per day from 60,000 barrels per day
was completed. In addition, the fluid catalytic cracking reactor was
replaced with state of the art technology.
Uzi Yemin, Chairman, President and Chief Executive Officer of Delek US
stated, "We have continued to take steps to improve our operations and
ability to generate free cash flow. These new pipelines are expected to
increase our crude sourcing flexibility in 2016 by improving our access
to Midland and Cushing crude supplies. With the completion of our Tyler
refinery turnaround and expansion project we have reached the end of a
large capital investment program in our refining segment. This program
resulted in increased crude slate flexibility and nameplate capacity, as
well as the replacement of the FCC reactors and the completion of
turnarounds at both refineries over the last year. This should improve
our free cash flow potential as our capital expenditure needs are
expected to decline in the second half of 2015. We remain focused on
creating long-term value for our shareholders by growing our business,
while returning cash to our shareholders through dividends and our $125
million share repurchase program."
About Delek US Holdings, Inc.
Delek US Holdings, Inc. is a diversified downstream energy company with
assets in petroleum refining, logistics and convenience store retailing.
The refining segment consists of refineries operated in Tyler, Texas and
El Dorado, Arkansas with a combined nameplate production capacity of
155,000 barrels per day. Delek US Holdings, Inc. and its affiliates own
approximately 62 percent (including the 2 percent general partner
interest) of Delek Logistics Partners, LP. Delek Logistics Partners, LP
(NYSE: DKL) is a growth-oriented master limited partnership focused on
owning and operating midstream energy infrastructure assets. The retail
segment markets fuel and merchandise through a network of approximately
365 company-operated convenience store locations operated under the
MAPCO Express®, MAPCO Mart®, East Coast®, Fast Food and Fuel™, Favorite
Markets®, Delta Express® and Discount Food Mart™ brand names.
Safe Harbor Provisions Regarding Forward-Looking Statements
This press release contains forward-looking statements that are based
upon current expectations and involve a number of risks and
uncertainties. Statements concerning current estimates, expectations and
projections about future results, performance, prospects and
opportunities and other statements, concerns, or matters that are not
historical facts are “forward-looking statements,” as that term is
defined under the federal securities laws.
Investors are cautioned that the following important factors, among
others, may affect these forward-looking statements. These factors
include but are not limited to: gains and losses from derivative
instruments; risks and uncertainties with respect to the quantities and
costs of crude oil we are able to obtain and the price of the refined
petroleum products we ultimately sell; operating hazards inherent in
transporting, storing and processing crude oil and intermediate and
finished petroleum products; management's ability to execute its
strategy of growth through acquisitions and the transactional risks
associated with acquisitions; our competitive position and the effects
of competition; the projected growth of the industries in which we
operate; changes in the scope, costs, and/or timing of capital and
maintenance projects; general economic and business conditions,
particularly levels of spending relating to travel and tourism or
conditions affecting the southeastern United States; and other risks
contained in our filings with the United States Securities and Exchange
Commission.
Forward-looking statements should not be read as a guarantee of future
performance or results and will not be accurate indications of the times
at, or by which such performance or results will be achieved.
Forward-looking information is based on information available at the
time and/or management's good faith belief with respect to future
events, and is subject to risks and uncertainties that could cause
actual performance or results to differ materially from those expressed
in the statements. Delek US undertakes no obligation to update or revise
any such forward-looking statements.
Copyright Business Wire 2015
