By OGJ editors
HOUSTON, Aug. 6 -- Alaska Gov. Frank H. Murkowski said Alaska is negotiating with a potential buyer of state royalty oil for use at the Williams Co. Inc.'s North Pole refinery. The existing contract for state royalty oil expires in December.
"We are pleased to announce that we are entering negotiations with Flint Hills Resources LP regarding the possible purchase of 70,000 b/d of royalty oil," Murkowski said during a news conference.
Flint Hills, a wholly owned subsidiary of Koch Industries Inc., Wichita, Kan., is negotiating with Williams to purchase its Alaska refinery and some other assets, Murkowski said.
At the same time, Flint Hills is negotiating with Alaska to be assured of a steady supply of crude oil, he added.
A Williams spokesman declined comment, adding it was against company policy to discuss any negotiation until an agreement was signed. A Koch Industries's spokeswoman was not immediately available for comment.
Last year, Williams announced it wanted to sell its North Pole refinery, owned by Williams Alaska Petroleum Inc. Williams also wants to sell its 3% stake in the TransAlaska Pipeline System (OGJ Online, June 24, 2002).
"Our interest in negotiating with Flint Hills is to, first, assure that the constitutional mandate to develop Alaska's resources for the maximum benefit of the people of the state is upheld," Murkowski said. "Therefore, we will negotiate a good price for the royalty oil. . . ."
He also expressed concern about a disparity in motor fuel retail prices between Fairbanks, where it is refined, and Anchorage. Murkowski said that Fairbanks residents often have to pay more, and he would like to see "a guarantee of parity of wholesale prices to be included in the royalty contract."
