Alaska, Flint Hills ponder North Pole refinery's fate

Nick Snow
Washington Editor

WASHINGTON, DC, Dec. 15 -- Alaska's state government and Flint Hill Resources will begin a joint effort to position the company's refinery at North Pole for long-term success, Gov. Sarah H. Palin announced on Dec. 10.

"The Flint Hills Resources Alaska refinery in North Pole has a significantly positive economic impact throughout our state," Palin said. "The refining operation is a major employer in Alaska and is vital to the operations of Anchorage International Airport, the Port of Anchorage, and the Alaska Railroad," she added.

The move came after Flint Hills' announcement in May that it was reviewing alternatives for the refinery due to financial challenges. The plant is Alaska's largest refinery with a 240,000 b/d processing capacity. About 60% of its products are destined for the aviation market.

Palin said both the state and Flint Hills would evaluate options aimed at improving the plant's ability to respond to volatile energy costs, varying product demands and volatile refining margins as well as facilitating upgrades to position the installation for long-term success.

The governor said Flint Hills has agreed to provide data to the state's Department of Natural Resources, which has assured that it will remain confidential. The data will let the state agency analyze refinery economics over 3-6 months, Palin said.

The Alaska Railroad and Flint Hills also will review potential opportunities to structure refinery ownership and operations as part of a corporation similar to, or part of, the Alaska Railroad, Palin indicated. The state will consider impacts on other Alaska refineries in all case, she emphasized.

Contact Nick Snow at nicks@pennwell.com.

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