Hydrocarbon Processing Copying and distributing are prohibited without permission of the publisher
Email a friend
  • Please enter a maximum of 5 recipients. Use ; to separate more than one email address.



Flint Hills to close North Pole refinery in Alaska

02.05.2014  |  HP News Services

Flint Hills will permanently shut its 85,000 bpd North Pole refinery, Alaska’s largest by capacity, citing poor economics and high costs for cleaning up soil and groundwater.

Keywords:

By LYNN DOAN and ELIOT CAROOM
Bloomberg

Flint Hills Resources will begin to permanently halt operations in May at its North Pole refinery, Alaska’s largest by capacity, citing poor economics and “enormous” costs for cleaning up soil and groundwater.

The subsidiary of Koch Industries will take the extraction unit at the refinery near Fairbanks out of service on May 1, ending gasoline production, and shut the No. 2 crude unit by June 1, ceasing the output of jet fuel and all other refined products, the Wichita, Kansas-based company said. It will continue to sell fuels at terminals in Anchorage and Fairbanks.

The announcement follows the shutdown of the refinery’s No. 1 crude unit in early 2012 because of what Flint Hills described at the time as “challenging economics” and rising crude prices. Cleaning contaminated soil and groundwater has further compounded costs, the company said.

“Our company has spent an enormous amount of money and resources addressing soil and groundwater contamination,” Mike Brose, manager of the North Pole refinery, said in the company’s statement. “With the already extremely difficult refining market conditions, the added burden of excessive costs and uncertainties over future cleanup responsibilities make continued refining operations impossible.”

Spot Alaska North Slope crude prices have climbed 9.2% in the past three years as oil production in the state declines. Output has dropped every year since 2002 as the yield from existing wells shrinks.

Sulfolane Contamination

The sulfolane contamination at the refinery occurred when Williams Cos. owned the plant and the state of Alaska held the land underneath it, Brose said. Flint Hills bought the complex and terminals in Fairbanks and Anchorage in July 2004, the company’s website shows.

“Neither Williams nor the State of Alaska have accepted any responsibility for the cleanup,” he said.

Ty Keltner, a spokesman for the Alaska Department of Environmental Conservation, said the agency is preparing a response to the company’s announcement. Tom Droege, a spokesman for Williams, didn’t immediately respond to a telephone request for comment.

The North Pole complex can run 226,500 bpd, data compiled by Bloomberg show. BP, ConocoPhillips, Tesoro and Petro Star also owned refineries in Alaska as of Jan. 1, 2013, according to an Energy Information Administration report.

Storage Capacity

Flint Hills will sell refined products at the terminals in Alaska using fuel shipped by rail or truck from refiners in the state and “other potential sources,” Jake Reint, a Koch spokesman, said by e-mail. The refinery has 720,000 bbl of tank storage capacity that’s linked to the company’s North Pole terminal.

The company “will entertain offers for the assets associated with the refinery as an ongoing enterprise or as a terminal/marketing operation,” Brose said. The refinery will keep 35 employees to operate the North Pole site and 10 to work at the Port of Anchorage terminal, according to the statement.



Have your say
  • All comments are subject to editorial review.
    All fields are compulsory.

olasunkanmi jimoh
02.13.2014

It is time for environmental agencies to accomodate interest in sustainable refining margins for refiners to avoid imminent shutdown of plants due to excessive burdens. It is the society that would be impacted in the final analysis. Headache from managing refinery operations is enough.

olasunkanmi jimoh
02.13.2014

It is time for environmental agencies to accomodate interest in sustainable refining margins for refiners to avoid imminent shutdown of plants due to excessive burdens. It is the society that would be impacted in the final analysis. Headache from managing refinery operations is enough.

Ahmad Kusha
02.06.2014

Is the equipment of Flint Refinery after shutdown will be available for sale ?

Related articles

FEATURED EVENT



Sign-up for the Free Daily HP Enewsletter!

Boxscore Database

A searchable database of project activity in the global hydrocarbon processing industry

Poll

Should the US allow exports of crude oil? (At present, US companies can export refined products derived from crude but not the raw crude itself.)


69%

31%




View previous results

Popular Searches

Please read our Term and Conditions and Privacy Policy before using the site. All material subject to strictly enforced copyright laws.
© 2014 Hydrocarbon Processing. © 2014 Gulf Publishing Company.