October 21, 2009 (FinancialWire) — Holly Corp. (NYSE: HOC) has sold a portion of its crude oil petroleum storage, and certain refinery-related crude oil pipeline receiving facilities at Holly’s Tulsa refinery to Plains All American Pipeline, LP (NYSE: PAA)

The company acquired the assets from Sunoco in June for $40 million in cash.

Under a related agreement between the parties, Holly will pay Plains a set amount per month for the exclusive use of the roughly 400,000 barrels of crude oil tankage Plains acquired as well as a fee for crude oil received by Holly through the crude oil pipeline receiving facilities purchased by Plains.

Holly will maintain ownership of the remaining 2.8 million barrels of intermediate and finished petroleum product tankage that was acquired as part of Holly’s Tulsa refinery acquisition from Sunoco in June 2009.

In conjunction with the transaction, Holly and Plains have also contractually agreed to explore the use of Holly and Plains Tulsa storage facilities to capture crude oil contango profit opportunities that may arise given the facilities close proximity to Cushing, Oklahoma.

Under a margin sharing agreement, Holly and Plains would equally share contango profits for crude oil purchased by Plains and delivered to the Tulsa facility for storage.

Dallas-based Holly is an independent petroleum refiner and marketer that produces light products such as gasoline, diesel fuel and jet fuel and specialty lubricants. The company owns refineries in Artesia, New Mexico, Tulsa, Oklahoma, and Woods Cross, Utah.

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