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June 2012

Vol. 17, No. 26 Week of June 24, 2012

Flint Hills closing unit in August

Eric Lidji

For Petroleum News

Flint Hills Resources LLC will close one of the two remaining processing units at its North Pole refining center a month earlier than originally planned, the company said.

The company will now idle the No. 1 processing unit on Aug. 1.

Flint Hills spokesman Jeff Cook said the bump up of the date came about as part of the normal process of idling the facility, and was not the result of any specific change.

Flint Hills originally operated three units at its North Pole refinery, but idled unit No. 3 in 2010. Once unit No. 1 is idle in August, Flint Hills will be left with only unit No. 2.

Cook described unit No. 2 as the “most versatile” of the three, capable of making all the products produced at the facility, including gasoline, diesel, asphalt, jet fuel and naphtha, but Cook declined to elaborate on the capacity of the remaining facility. He also declined to comment on how the reduction might impact a proposal by Flint Hills and the electric cooperative Golden Valley Electric Association to truck liquefied natural gas from the North Slope to use at facilities for both entities, as a way to cut down on their fuel costs.

The idling of the unit means the loss of 38 of the 175 jobs at the refinery, although Cook said some of those employees would be offered other positions within the company.

When Flint Hills announced its decision in April to close one of its two remaining processing units, it cited “challenging economics and rising crude prices” and said “a single crude unit configuration gives us the best platform to work on these problems.”

Flint Hills has said the idling would not keep it from meeting contractual commitments.

The Associated Press reported June 20 that the Alaska Railroad is eliminating 52 positions because less fuel is being shipped from the Flint Hills North Pole refinery to Ted Stevens Anchorage International Airport, a loss of about $5 million in railroad business.

The railroad blamed the downturn in the economy, with cargo flights using the Anchorage airport, a majority of its business, in decline since 2009.

—The Associated Press contributed to this story






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