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Related Party Transactions
12 Months Ended
Dec. 31, 2022
Related Party Transactions [Abstract]  
Related Party Transactions Related Party Transactions
We serve many of HF Sinclair’s refinery and renewable diesel facilities under long-term pipeline, terminal and tankage throughput agreements, and refinery processing unit tolling agreements expiring from 2023 to 2037, and revenues from these agreements accounted for approximately 80% of our total revenues for the year ended December 31, 2022. Under these agreements, HF Sinclair agrees to transport, store, and process throughput volumes of refined product, crude oil and feedstocks on our pipelines, terminals, tankage, loading rack facilities and refinery processing units that result in minimum annual payments to us. These minimum annual payments or revenues are generally subject to annual rate adjustments on July 1st each year based on increases or decreases in the Producer Price Index (“PPI”) or FERC index. As of December 31, 2022, these agreements with HF Sinclair require minimum annualized payments to us of $452.6 million.

If HF Sinclair fails to meet its minimum volume commitments under the agreements in any quarter, it will be required to pay us the amount of any shortfall in cash by the last day of the month following the end of the quarter. Under certain of these agreements, a shortfall payment may be applied as a credit in the following four quarters after its minimum obligations are met.

Under certain provisions of the Omnibus Agreement, we pay HF Sinclair an annual administrative fee (currently $5.0 million) for the provision by HF Sinclair or its affiliates of various general and administrative services to us. In connection with the HEP Transaction, we paid HF Sinclair a temporary monthly fee of $62,500 from the Closing Date through November 30, 2022, relating to transition services provided to HEP by HF Sinclair. Neither the annual administrative fee nor the temporary monthly fee includes the salaries of personnel employed by HF Sinclair who perform services for us on behalf of HLS or the cost of their employee benefits, which are charged to us separately by HF Sinclair. Also, we reimburse HF Sinclair and its affiliates for direct expenses they incur on our behalf.

Related party transactions with HF Sinclair are as follows:
Revenues received from HF Sinclair were $438.3 million, $390.8 million and $399.8 million for the years ended December 31, 2022, 2021 and 2020, respectively.
HF Sinclair charged us general and administrative services under the Omnibus Agreement of $4.5 million for the year ended December 31, 2022 and $2.6 million for each of the years ended December 31, 2021 and 2020.
We reimbursed HF Sinclair for costs of employees supporting our operations of $78.2 million, $61.2 million and $55.8 million for the years ended December 31, 2022, 2021 and 2020, respectively.
HF Sinclair reimbursed us $14.7 million, $7.9 million and $10.0 million for the years ended December 31, 2022, 2021 and 2020, respectively, for expense and capital projects.
We distributed $83.5 million in each of the years ended December 31, 2022 and 2021 and $95.2 million in the year ended December 31, 2020 to HF Sinclair as regular distributions on its common units.
Accounts receivable from HF Sinclair were $63.5 million and $56.2 million at December 31, 2022 and 2021, respectively.
Accounts payable to HF Sinclair were $15.8 million and $11.7 million at December 31, 2022 and 2021, respectively.
Revenues for the years ended December 31, 2022, 2021 and 2020 include $0.4 million, $0.4 million and $0.5 million, respectively, of shortfall payments billed to HF Sinclair in 2021, 2020 and 2019, respectively. Deferred revenue in the consolidated balance sheets at December 31, 2021, includes $4.1 million, relating to certain shortfall billings to HF Sinclair.
We received direct financing lease payments from HF Sinclair for use of our Artesia and Tulsa railyards of $2.2 million for the year ended December 31, 2022 and $2.1 million for each of the years ended December 31, 2021 and 2020.
We recorded a gain on sales-type leases with HF Sinclair of $24.7 million during the year ended December 31, 2021, and we received sales-type lease payments of $91.6 million, $28.9 million and $9.5 million from HF Sinclair that were not included in revenues for the years ended December 31, 2022, 2021 and 2020, respectively.
HEP and HFC reached an agreement to terminate the existing minimum volume commitments for HEP's Cheyenne assets and enter into new agreements, which were finalized and executed on February 8, 2021, with the following terms, in each case effective January 1, 2021: (1) a ten-year lease with two five-year renewal option periods for HFC’s (and now HF Sinclair's) use of certain HEP tank and rack assets in the Cheyenne Refinery to facilitate renewable diesel production with an annual lease payment of approximately $5 million, (2) a five-year contango service fee arrangement that will utilize HEP tank assets inside the Cheyenne Refinery where HFC (and now HF Sinclair) will pay a base tariff to HEP for available crude oil storage and HFC (and now HF Sinclair) and HEP will split any profits generated on crude oil contango opportunities and (3) HFC paid a $10 million one-time cash payment to HEP for the termination of the existing minimum volume commitment.
Contemporaneous with the closing of the Sinclair Transactions, HEP and HFC amended certain intercompany agreements, including the master throughput agreement, to include within the scope of such agreements certain of the assets acquired by HEP pursuant to the Contribution Agreement.