Alaska, Flint Hills to jointly consider fate of North Pole refinery

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.

Jan 2nd, 2009

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. 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," Palin said.

The move came following Flint Hills' announcement in May that it was reviewing alternatives for the refinery due to financial challenges. The plant is Alaska's largest oil refinery with a 240,000 bbl daily processing capacity, according to information at the company's website. About 60% of its products are destined for the aviation market, it noted.

Palin said that 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.

She said that 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/or operations as part of a corporation similar to, or part of, the Alaska Railroad, she 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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