Flint Hills to shut down Alaska refinery crude unit amid poor margins

By BEN LEFEBVRE

HOUSTON -- Flint Hills Resources said Wednesday poor refining economics were forcing it to suspend operations at a major fuel processing unit and lay off staff at its refinery in North Pole, Alaska.

The refinery is the latest in the US to either curb production or shut down entirely in the face of falling fuel demand and rising crude oil costs.

ConocoPhillips, Sunoco, Valero Energy and Western Refining have all idled refineries in the past several years.

Privately-held Flint Hills said it has already started idling the 220,000 bpd refinery's No. 1 crude distillation unit, generally the first unit in the refining process.

Flint Hills idled the Alaska refinery's No. 3 crude unit in 2010 but will continue to run the No. 2 CDU to produce jet fuel, gasoline, asphalt and specialty fuels for the Alaskan market.

Idling the unit will force the company to lay off up to 40 of the 151 employees at the refinery over the next five months, the company said.

The company blamed high crude oil prices and "challenging economics."

"Crude oil prices and Alaska North Slope Crude prices in particular are very high and are expected to remain that way for the foreseeable future," Alaska refinery manager Mike Brose said.


Dow Jones Newswires

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