Alaska News

Tesoro buys some Flint Hills assets but not polluting North Pole refinery

Tesoro Alaska has agreed to purchase the marketing and logistics arms of Flint Hills Resources, though not its troubled refinery, in an acquisition that will help Tesoro expand its refinery sales to the Interior.

Not included in the deal is Flint Hills' North Pole refinery east of Fairbanks, where drinking water wells were contaminated with the solvent sulfolane. Flint Hills announced it was closing the refinery in February 2014. The closure became an issue when Flint Hills' owners, the billionaire Koch brothers, poured millions of dollars into conservative political action committees in the 2014 election.

Tesoro said the acquisition includes a multi-year agreement to allow storage of fuels at Flint Hills' North Pole terminal, which will "provide efficient rail offload capabilities" and provide Tesoro with access to the Interior.

Also part of the deal are Flint Hills' wholesale fuel marketing contracts in Alaska; a terminal at the Fairbanks airport that includes 22,500 gallons of jet fuel storage; and an Anchorage terminal that includes 580,000 barrels of storage capacity.

"We have been a part of the Alaska community since 1969, and over the last five years we have invested more than $300 million in our Alaska operations," said Greg Goff, Chairman, chief executive of Tesoro Corp. "We look forward to continuing our operations in the state."

Gov. Bill Walker issued a statement congratulating Tesoro.

"This news further proves that business is alive and well in Alaska, and investors are optimistic about the opportunities that lie ahead in our state," Walker said.

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Tesoro will gain access to rail-loading capabilities at Flint Hills' Anchorage terminal, which will help the company better serve customers from its existing terminal, the company said. The company expects to offer access to qualified third parties at Flint Hills' Anchorage terminal.

The transaction is expected to close within 60 days, pending regulatory and other approvals, the company said.

Alex DeMarban

Alex DeMarban is a longtime Alaska journalist who covers business, the oil and gas industries and general assignments. Reach him at 907-257-4317 or alex@adn.com.

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