1283140--2/26/2007--HOLLY_ENERGY_PARTNERS

related topics

{gas, price, oil}

{customer, product, revenue}

{operation, natural, condition}

{cost, contract, operation}

{cost, regulation, environmental}

{acquisition, growth, future}

{tax, income, asset}

{debt, indebtedness, cash}

{regulation, change, law}

We depend on Alon and particularly its Big Spring Refinery for a substantial portion of our revenues; and if those revenues were significantly reduced, there would be a material adverse effect on our results of operations. We are exposed to the credit risks of our key customers. Competition from other pipelines that may be able to supply our shippers customers with refined products at a lower price could cause us to reduce our rates or could reduce our revenues. A material decrease in the supply, or a material increase in the price, of crude oil available to Holly s and Alon s refineries, could materially reduce our revenues. We may not be able to retain existing customers or acquire new customers. Our operations are subject to federal, state, and local laws and regulations relating to environmental protection and operational safety that could require us to make substantial expenditures. Our operations are subject to operational hazards and unforeseen interruptions for which we may not be adequately insured. Any reduction in the capacity of, or the allocations to, our shippers in interconnecting, third-party pipelines could cause a reduction of volumes transported in our pipelines and through our terminals. If our assumptions concerning population growth are inaccurate or if Holly s growth strategy is not successful, our ability to grow may be adversely affected. Growing our business by constructing new pipelines and terminals, or expanding existing ones, subjects us to construction risks. Rate regulation may not allow us to recover the full amount of increases in our costs. If our interstate or intrastate tariff rates are successfully challenged, we could be required to reduce our tariff rates, which would reduce our revenues. Potential changes to current petroleum pipeline rate-making methods and procedures may impact the federal and state regulations under which we will operate in the future. Terrorist attacks, and the threat of terrorist attacks, have resulted in increased costs to our business. Continued hostilities in the Middle East or other sustained military campaigns may adversely impact our results of operations. Our leverage may limit our ability to borrow additional funds, comply with the terms of our indebtedness or capitalize on business opportunities.

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1283140--2/26/2007--HOLLY_ENERGY_PARTNERS_LP