FAIRBANKS -- The Flint Hills Refinery in North Pole has started its shutdown procedures and has stopped producing gasoline.
The refinery intends to halt production of jet and diesel fuel by May 24, which will end its refining operations. It will become a fuel terminal, supplied by tank cars on the Alaska Railroad.
The closure is to be followed by months of a decommissioning process intended to keep the complex piping systems on the complex in good condition, said Flint Hills spokesman Jeff Cook. If a buyer is found, the refinery could go back into operation.
The company announced in February that it was shutting down this spring because of economic factors including ongoing costs associated with the cleanup of sulfolane that began many years before it bought the property from the Williams Cos. and the high price of Alaska North Slope crude oil.
Cook said that after June 1 the company will be known as the Flint Hills Alaska Terminal Group.
About 35 employees are expected to remain with the company to run the tank farm, which can store 720,000 barrels of fuel. Some other employees are transferring to jobs with Flint Hills in the Lower 48, said Cook.
The company will stop receiving crude oil from the trans-Alaska pipeline later this month.
It will continue to sell fuel products from its facilities in North Pole, which will be supplied by tank cars on the Alaska Railroad transporting fuel from other refineries.
The major product of the North Pole refinery has been jet fuel for the Anchorage market, so the northbound rail shipments are expected to be far more limited than the southbound oil freight has been for many years.
Flint Hills is a refining, chemicals and biofuels company owned by Koch Industries that has more than 4,000 employees and has been growing rapidly Outside.
The state is in court and negotiating with Flint Hills, as well as with the Williams Cos., former owners of the refinery, about dividing liability for the sulfolane spill. The chemical has been found in the groundwater up to 3 miles from the refinery.
Spills of the solvent began in the 1980s when Williams owned the property. Flint Hills bought the refinery a decade ago.
The end of refining operations is expected to create a $6 million cash hit for the Alaska Railroad this year compared to 2013 and an $11 million cut in 2015. The railroad continues to run five trains a week to Anchorage for various customers.
Dermot Cole can be reached at dermot(at)alaskadispatch.com. Follow him on Twitter at @DermotMCole
By DERMOT COLE