Flint Hills will cease refinery operations at North Pole

Photo/Tim Bradner/AJOC

Flint Hills Resources will cease refining operations at its North Pole refinery near Fairbanks this spring, the company announced Tuesday in a press release.

The extraction unit at the refinery will be shut down on May 1, ending gasoline production. Crude Oil Processing Unit No. 2 will shut down shortly thereafter, depending on operational requirements, but no later than June 1, 2014, the company said.

Flint Hills will continue marketing activities in Interior Alaska, the company said.

The closure of Unit No. 2 will end production of jet fuel and all other refined products. The company will continue to market fuels through its terminals in Anchorage and Fairbanks. Supply for those terminals will come from other sources, Flint Hills said.

“This has been a difficult decision made after a long, thorough and deliberative process,” said Mike Brose, a company vice president an the refinery manager.

The refinery has faced difficult economic conditions in recent years, mainly the loss of jet fuel sales to air carriers in Anchorage due to jet fuel imports. However, Brose said the financial liability of soil and groundwater contamination left by previous owners were a major factor in the decision.

“Our company has spent an enormous amount of money and resources addressing soil and groundwater contamination that was caused when Williams owned the refinery and the State of Alaska owned the land underneath it,” Brose said in the press release.

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

The refinery has been a major supplier of gasoline, jet fuel, diesel and other products in Interior Alaska, including to major military installations.

One other small refinery operates in the Interior region, a plant owned and operated by Petro Star Inc.

02/04/2014 - 12:10pm