Koch Unit Set to Acquire Williams Properties

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Koch Unit Set to Acquire Williams Properties

FAIRBANKS, Alaska -- Koch Industries' refining subsidiary Flint Hill Resources LP is in talks to buy Williams Cos.' 220,000 barrel per day (bpd) refinery at North Pole, Alaska, the Alaska governor's office said on Tuesday. In addition to the refinery, Williams is selling 29 convenience stores, a 3 percent interest in the Trans-Alaska pipeline system and a terminal at the port of Anchorage.

"Flint Hills is negotiating with Williams to purchase its refinery and other assets in Alaska, including its interest in the Trans-Alaska pipeline system," according to a statement by Alaska Gov. Frank Murkowski. "We have decided to enter into negotiations under the assumption there will be a contractual agreement very shortly,'' Murkowski said.

Murkowski said he expected to see the two sides reach a deal toward the end of the year, if not sooner.

Williams spokesman Jeff Cook told the Fairbanks Daily News-Miner he couldn't say whether talks with Flint Hills have moved any further than they had with previous potential buyers. ''I can tell you there are other interested parties,'' he said.

Flint Hills already produces a combined 600,000 barrels of crude oil a day at its refineries in Pine Bend, Minn., and Corpus Christi, Texas.

Facing billions in debt, Williams has been trying to sell all its Alaska properties. The refinery employs roughly 150 people, while about 25 more work for Williams Alaska in Anchorage. Statewide, the Williams convenience stores employ about 300 people.

Last week in Anchorage, Murkowski met with representatives of Flint Hills and Williams, as well as Tesoro Oil Co. to discuss the royalty oil contract for the refinery, which currently delivers about 70,000 barrels per day of state oil. Murkowski said the new contract would include a number of requests and demands from the state, the most significant being a requirement that the wholesale prices of jet fuel and gasoline be the same in Alaska's two largest cities.

Murkowski said he hopes to decrease the retail gas price disparity between Anchorage and Fairbanks ? gas is often considerably cheaper in Anchorage by fixing it on the wholesale end, the report said.

The contract would include a set price as well as a per-barrel amount paid to the state, Murkowski said, but he wouldn't offer specific numbers. He said most other monetary terms of the deal would be similar to those of the current state contract with Williams.