Crude Oil ( ) Brent Crude ( ) Natural Gas ( ) S&P 500 ( ) PHLX Oil ( )
 March 23, 2015 - 8:15 AM EDT
Print Email Article Font Down Font Up
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.

Delek US Holdings Inc.
Keith Johnson, 615-435-1366
Vice President of Investor Relations
Alpha IR Group
Chris Hodges, 312-445-2870
Founder & CEO

Source: Business Wire (March 23, 2015 - 8:15 AM EDT)

News by QuoteMedia