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State Negotiating With Potential Buyer for Williams Refinery


August 05, 2003
Tuesday - 2:40 pm

In a Monday morning press conference in Fairbanks, Governor Frank H. Murkowski announced that the State of Alaska is entering into negotiations with the potential buyer of state royalty oil for use at the Williams refinery in North Pole. The refinery is on the market, but buyers need to be assured of a steady supply of crude.

"We are pleased to announce that we are entering negotiations with Flint Hills Resources, LP, regarding the possible purchase of 70,000 barrels per day of royalty oil," Murkowski said.

Flint Hills is negotiating with Williams to purchase its refinery and other assets in Alaska, including its interest in TAPS. Flint Hills is a wholly-owned subsidiary of Koch Industries, a privately-held Wichita, Kansas corporation. Williams' contract for state royalty oil expires in December, 2003.

"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. Second, we want to leverage our position to further benefit Alaska and the Interior. We are asking for commitments from Flint Hills to increase Alaska hire in their operations and to make capital investments to upgrade their refinery and their tank farm in Anchorage.

"I have also expressed my deep concern about the disparity in retail prices of motor fuels between Fairbanks, where it is refined, and Anchorage, another area where it is marketed. There is no legitimate reason why Fairbanksans should be paying as much as 23 cents a gallon more. We would like a guarantee of parity of wholesale prices to be included in the royalty contract.

"Continuation of operations of the North Pole refinery is crucial to the economy of Alaska's Interior and for the many workers it employs," Murkowski said. "In the event Flint Hills is the successful buyer, we look forward to a good working relationship with them and would welcome them as a corporate neighbor in Alaska."

Murkowski was joined in the press conference by former Attorney General Charlie Cole, who is a member of the State Oil and Gas Royalty Development Board.


Source of News Release:

Office of the Governor
Web Site


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