Let's face it, building pipeline to move oil and gas takes a long time, and several refiners and exploration and production companies just can't wait around for these pipes to get built. That is a large reason why HollyFrontier (NYSE: HFC ) just announced that it and its midstream subsidiary Holly Energy Partners (NYSE: HEP ) plan to add rail capacity of 70,000 barrels per day to its operations to move oil from Holly Energy's pipes in Southeast New Mexico to HollyFrontier's refining facilities in the region.
HollyFrontier joins a growing list of refiners that are using rail to supply crude for its operations, and it looks as though this is a pretty advantageous relationship for both refiners and railroad companies. in this video, Fool.com contributor Tyler Crowe looks at some of the advantages of moving crude via rail has for both parties and if this trend will continue as more pipeline gets built.
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