Petroleum refiner and marketer HollyFrontier Corporation is to spend approximately $225m on expanding the capacity of its Woods Cross refinery in the US state of Utah.
The refinery's capacity will be expanded to 45,000bpd from 31,000 barrel per day, with the project to be completed in late 2014.
The incremental yields from the expansion will be 60% petrol and 40% diesel.
The project includes a relocation/revamp of crude, fluid catalytic cracking and polymerisation units from Western Refining's Bloomfield refinery in New Mexico to Woods Cross, expanding the Woods Cross diesel hydrotreater and investing in associated utilities and offsites.
HollyFrontier has entered a crude oil supply deal with Newfield Exploration in conjunction with the Woods Cross refinery expansion.
The 20,000bpd crude oil supply agreement spans ten years, with commitments commencing on completion of the expansion project.
Newfield Exploration will deliver black and yellow wax crude oil produced in the nearby Uinta basin region for the Woods Cross refinery.
HollyFrontier president and CEO Mike Jennings said the refinery expansion project supported by the Newfield supply deal will allow HollyFrontier to significantly increase earnings and production from the refinery.
"With the recent start-up of the UNEV pipeline, we will have the option to market additional products from this expansion to Cedar City, Utah, and Las Vegas, as well as to our traditional customers in Salt Lake City and the Inter-Mountain West," said Jennings.