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Williams sells Alaska holdings to 3 companies North Pole refinery goes to Flint Hills, pipeline interest to Koch, convenience stores to Holiday Stationstores in $265 million deal Petroleum News
Tulsa, Okla.-based Williams said Nov. 17 that it is selling its Alaska assets to three companies: the North Pole refinery to Flint Hills Resources; a 3.0845 percent share of the trans-Alaska pipeline to Koch Alaska Pipeline; and 26 convenience stores to Holiday Stationstores.
Both Flint Hills Resources and Koch Pipeline Co. are wholly owned subsidiaries of privately held, Wichita-Kan.-based Koch Industries. Koch Alaska Pipeline is a subsidiary of Koch Pipeline Co. Holiday Stationstores is owned by Holiday Cos., a private company founded in Wisconsin in 1928, and is the sole distributor of a low-sulfur gasoline produced by Flint Hills Resources in Minnesota.
Koch Industries has interests in trading, petroleum, asphalt, natural gas, gas liquids, chemicals, plastics and fibers, chemical technology equipment, minerals, fertilizers, ranching, securities and finance. Sales expected to close next year Williams said the transactions are expected to close in the first quarter of 2004. They are subject to Hart-Scott-Rodino review and other conditions and approvals, including Flint Hills Resources’ successful completion of a crude oil supply contract with the state of Alaska, which must be approved by the Alaska Legislature. The interest in the trans-Alaska pipeline is subject to preferential purchase rights by the other owners of the pipeline.
Williams said the selling price, approximately $265 million in cash, is subject to closing adjustments for items such as the value of petroleum inventories.
Flint Hills Resources is purchasing the North Pole refinery, two petroleum terminals in Anchorage and Fairbanks, and crude oil and refined products inventories.
Jeff Cook, Williams’ North Pole spokesman, said the throughput capacity of the North Pole refinery is 220,000 barrels per day. Typically 70,000 bpd is refined and roughly 150,000 bpd returned to the trans-Alaska pipeline. About 60 percent of current production is jet fuel, he said, with the balance a combination of diesel, gasoline, asphalt during season, specialized turbine fuel and naphtha for export. Williams exiting refining In addition to the cash proceeds, Williams said, the transaction eliminates two cash-collateralized letters of credit that Williams has with the state of Alaska, releasing $90.9 million back to the company.
“This is simply a new day for Williams. We’re exiting the refining sector, focusing on our natural gas businesses and wrapping up divestitures that we targeted for sale,” Steve Malcolm, Williams’ chairman, president and chief executive officer, said in a statement.
Williams announced its intention to divest the North Pole refinery in June 2002. Since that time, the company has divested refining interests in Memphis, Tenn., and Lithuania. Williams said the sales are part of its commercial strategy to concentrate on natural gas production, processing and pipeline transportation.
Malcolm added, “We’ve taken command of our finances and our future. Our asset sales have served to build a healthier Williams. We have recently completed the early retirement of $950 million in debt and made some modest incremental investments to increase our rig count in the Rockies.”
Wichita, Kan.-based Flint Hills Resources, a wholly-owned subsidiary of Koh Industries, produces fuels, base oils for lubricants, and other petrochemical products. It owns refineries in Minnesota and Texas.
Koch Alaska Pipeline Co. is a subsidiary of Koch Pipeline Co., which operates about 8,000 miles of crude oil, natural gas liquids and refined products pipelines. Koch Pipeline is based in Wichita, Kan., and operates in Minnesota, Wisconsin, Iowa, Missouri, Texas, Oklahoma, Louisiana, Illinois and Kansas. Koch Pipeline is a wholly owned subsidiary of Koch Industries.
Holiday Stationstores, owned by Holiday Cos., has 350 combination convenience stores/gas stations in Minnesota, Wisconsin, Michigan, North Dakota, South Dakota, Iowa, Nebraska, Wyoming, Montana, Idaho and Washington.
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