| Item 1.01 | Entry into a Material Definitive Agreement. |
Ninth Amended and Restated Master Throughput Agreement
Background
Holly Energy Partners – Operating, L.P. (“HEP Operating”), a wholly-owned subsidiary of Holly Energy Partners, L.P. (“HEP”), HF Sinclair Refining & Marketing LLC (formerly known as HollyFrontier Refining & Marketing) (“HFRM”), a wholly-owned subsidiary of HF Sinclair Corporation (“HF Sinclair”), and certain of their affiliates were parties to that certain Third Amended and Restated Crude Pipelines and Tankage Agreement, dated March 12, 2015 (as amended, the “Third Amended and Restated Crude Pipelines and Tankage Agreement”), pursuant to which HEP Operating provided certain transportation services to HFRM with respect to certain crude pipelines owned by subsidiaries of HEP. The Third Amended and Restated Crude Pipelines and Tankage Agreement expired in accordance with its terms on February 28, 2023.
Ninth Amended and Restated Master Throughput Agreement Terms
In connection with the expiration of the Third Amended and Restated Crude Pipelines and Tankage Agreement, on February 27, 2023, HEP Operating and HFRM entered into the Ninth Amended and Restated Master Throughput Agreement (the “Ninth Amended and Restated Master Throughput Agreement”). The Ninth Amended and Restated Master Throughput Agreement amends and restates in its entirety the Eighth Amended and Restated Master Throughput Agreement dated effective March 14, 2022. Pursuant to the Ninth Amended and Restated Master Throughput Agreement, among other things, effective March 1, 2023, HFRM agreed to minimum throughput commitments on the Crude Pipelines (as defined therein), which were previously covered under the Third Amended and Restated Crude Pipelines and Tankage Agreement, and will pay HEP Operating tariffs associated with the movements on the Crude Pipelines. The tariffs are subject to adjustment as provided in the Ninth Amended and Restated Master Throughput Agreement. The arrangement with respect to the Crude Pipelines has a term of 10 years from its effective date of March 1, 2023. In addition, the Ninth Amended and Restated Master Throughput Agreement amends certain terms applicable to the Sinclair Crude Oil Pipelines (as defined therein) effective February 1, 2023.
The description of the Ninth Amended and Restated Master Throughput Agreement herein is qualified by reference to the copy thereof filed as Exhibit 10.1 to this report, which is incorporated by reference into this report in its entirety.
Second Amended and Restated Transportation Services Agreement
On February 23, 2023, HFRM and UNEV Pipeline, LLC (“UNEV”), a wholly-owned subsidiary of HEP, entered into a Second Amended and Restated Transportation Services Agreement, effective as of March 1, 2023 (the “Second A&R TSA”). The Second A&R TSA amends and restates in its entirety the Amended and Restated Transportation Services Agreement, dated as of January 1, 2012, by and between UNEV and HFRM (as amended to date, the “Prior HFRM TSA”), to, among other things, provide for a minimum throughput commitment on the UNEV Pipeline and consolidate the services provided under the Prior HFRM TSA and the Amended and Restated Transportation Services Agreement, dated as of January 1, 2012, as amended, by and between UNEV and Sinclair Oil LLC (f/k/a Sinclair Oil Corporation), a wholly-owned subsidiary of HF Sinclair. HFRM will pay UNEV tariffs associated with the movements on the UNEV Pipeline. The tariffs are subject to adjustment as provided in the Second A&R TSA. The arrangement under the Second A&R TSA has a term of nine years from its effective date on March 1, 2023.
The description of the Second A&R TSA herein is qualified by reference to the copy thereof filed as Exhibit 10.2 to this report, which is incorporated by reference into this report in its entirety.
