HollyFrontier To Convert Cheyenne Refinery To Renewable Diesel

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HollyFrontier has approved a plan to convert the Cheyenne Refinery to renewable diesel production and to construct a pre-treatment unit (“PTU”) located at the Artesia Refinery. Including the previously announced renewable diesel unit at the Artesia Refinery, HollyFrontier is expected to have a combined capacity to produce over 200 million gallons per year of renewable diesel and pre-treat over 80% of its feedstock. HollyFrontier expects to invest between $650-$750 million in its renewables business, with an expected aggregate internal rate of return of 20-30%.

Conversion of the Cheyenne Refinery to Renewable Diesel Production

With expected capital spending of $125-$175 million, HollyFrontier intends to repurpose Cheyenne’s current footprint and a portion of its existing assets to produce approximately 90 million gallons per year of renewable diesel. HollyFrontier expects the project will be completed in the first quarter of 2022 and generate an internal rate of return of 20-30%.

Construction of Pre-Treatment Unit at the Artesia Refinery

HollyFrontier also plans to construct a PTU that will process over 80% of the feedstock for both of HollyFrontier’s renewable diesel plants. The PTU is expected to provide feedstock flexibility, mitigating single feedstock risk and generating value through the use of lower carbon intensity feed.

HollyFrontier estimates the capital cost of the PTU to be $175-$225 million and the in-service date to be in the first half of 2022. The PTU has an expected internal rate of return of 10-15% but is intended to protect the returns of HollyFrontier’s renewables business against potential volatility in the feedstock markets.