One consequence of the Williams Cos.’ June 18 decision to sell its Alaska refinery and gasoline marketing outlets may be the shelving of a plan to build a $1 billion petrochemical plant near the company’s refinery in North Pole, near Fairbanks.Williams has had the project under study for the last year and a half, and it is contingent on a North Slope natural gas pipeline being built that would supply natural gas liquids to the plant for the manufacture of petrochemical products. The company envisioned exporting the products to Asia.Without the refinery to share infrastructure, the project is likely to be less attractive to the Tulsa-based company, market analysts say.Jeff Cook, spokesman for Williams Alaska Petroleum Inc., the Alaska subsidiary, said he expects a decision to be made shortly on the future of the petrochemical plan and Williams’ possible participation in a consortium of pipeline companies to build a gas pipeline.But John Olson, an analyst with Sanders Morris Harris in Houston, Texas, said he thinks Williams will stay in the gas pipeline consortium if it moves forward. "Pipelines are their core business. They know it well," Olson said. He was less optimistic about the Fairbanks petrochemical venture, however, because it depends on sharing land and infrastructure with the refinery, which will be sold.Williams was slammed on Wall Street when investor confidence in the entire energy sector sank and federal regulators began looking into the company’s energy trading practices, a fallout of the Enron scandal.In an ill-timed development, the company was also saddled with $2.2 billion in debt after a former subsidiary, Williams Communications Group, filed for Chapter 11 bankruptcy protection.Williams’ shares fell 80 percent in value and rating agencies reduced its debt rating to near the value of junk bonds.The company will shed $1.5 billion to $3 billion in assets and possibly issue more stock to bring its debt-equity ratio down from 70-30 to 50-50, Olson said.Williams hopes to net $1 billion from the sale of its refinery, pipeline and marketing assets in Alaska and Tennessee by the end of the year, the company said in an announcement.Olson said the refineries and retail outlets are outside Williams’ core business, which is in pipelines. He thinks the Alaska assets, which include the refinery, two petroleum product terminals and 29 convenience store gasoline retail outlets, could sell for $300 million to $500 million.Williams would prefer to take its time with the sale, but heavy pressure from financial-rating agencies may push the company into selling faster than it would like, he said."Williams is a good company," Olson said. "They’re in the ditch now, but I’ve seen them in worse situations."Cook said he expects few changes in the refinery work force. Most workers in the plant went through the acquisition of MAPCO, the former owner, by Williams in 1998, and a few were there when MAPCO bought the refinery from Earth Resources in 1981, he said.The refinery was built in 1975 and 1976 by a group of Alaska and Texas investors, and was sold to Earth Resources, a Texas energy firm, soon after it started operation in 1977."An important point is that each time the refinery has changed owners there has been new investment and expansion" as new owners brought different expertise that allowed the refinery to develop new market niches, Cook said.The plant now processes about 215,000 barrels per day of crude oil to make roughly 70,000 barrels per day of petroleum products. Unused portions of the crude oil are returned to the trans-Alaska oil pipeline.Sixty percent of the plant’s output is jet fuel, which is mostly transported to Ted Stevens Anchorage International Airport for sale to air carriers. A smaller portion is gasoline, half of which is marketed through the company’s retail outlets, Cook said.Williams also makes naphtha, a petrochemical feedstock, which is shipped to Anchorage by rail and exported, and heating oil, diesel fuel and asphalt, which is sold in Alaska, he said.The company has about 500 employees in Alaska, 150 of them at the Fairbanks refinery, Cook said.Olson said Williams’ Alaska businesses were very profitable for the company, and he doesn’t expect any problems in finding a buyer.Others were less sure, however. One industry manager familiar with refining, speaking on condition his name not be used, said the Fairbanks refinery is basically a topping plant with limits on the range of products it can make. Other, larger refineries are equipped to make a wider range of products.In addition, the new owners of the North Pole refinery will be challenged to meet tight new environmental standards on diesel and gasoline, the source said.That means the ability to sell those products may shrink, making the refinery even more dependent on jet fuel sales in Anchorage, where air carriers can import foreign-made jet fuel if they get a better price.Another challenge the North Pole refinery faces is that next year a 25-year contract to buy state royalty oil at attractive terms comes to an end, state officials said.The contract, signed in 1978, guarantees the refinery the right to take up to 35,000 barrels per day of state-owned oil and has no premium price.This was the state’s first royalty oil sales contract. Since 1978 the state has asked royalty purchasers to pay a premium price. Williams has a second royalty oil supply contract signed in 1998 on which it pays a 15 cent-per-barrel premium.