State OKs terminal purchase

The state of Alaska has approved a purchase and sale agreement transferring ownership of Tesoro’s Terminal 1 at the Port of Anchorage to Petro Star Inc.

Petro Star is an Arctic Slope Regional Corp. subsidiary and ASRC said in a May 2 statement that Petro Star is now “one step closer to owning Terminal 1 at the Port of Anchorage.” The companies said Tesoro would continue to operate Terminal 1 while Petro Star secures necessary state and federal permits.

The state required the sale of Terminal 1 to preserve competition in the fuel market when Tesoro sought to purchase most of Flint Hill’s fuel storage assets in Anchorage and Fairbanks.

Tesoro’s acquisition of Flint Hills’ wholesale marketing and logistics assets in Anchorage and Fairbanks was announced in November 2015. The transaction was expected to close within 60 days, subject to completion of transition, planning and requested consents and approvals.

A consent decree between the state and Tesoro last June allowed the company to go ahead with the purchase of the wholesale and logistics assets in Anchorage and Fairbanks, subject to the sale of one of its existing terminals in Anchorage. In addition to the 580,000-barrel capacity former Flint Hills Anchorage terminal it was acquiring, Tesoro also owned two storage facilities at the port, Terminal 1 with 220,000 barrels of capacity and Terminal 2 with some 660,000 barrels of capacity.

“This is an excellent opportunity for Petro Star, and gives customers in this area of the state another choice when it comes to purchasing quality fuel and receiving superior service,” Rex A. Rock Sr., ASRC president and CEO, said in a May 2 statement.

Doug Chapados, president and CEO of Petro Star, said, “Petro Star has been looking for ways to expand into the largest fuel market in the state for quite some time. Until now, we did not have storage or fuel distribution facilities in Southcentral; Terminal 1 gives us both as well as access to the Port of Anchorage for receiving barge deliveries.”

The state required Tesoro to divest some of its facilities in the June 2016 agreement which then-Attorney General Craig Richards reached with Tesoro. The consent decree followed a six-month investigation by the Alaska Department of Law, which determined that Tesoro’s acquisition of Flint Hills’ tank farm would limit the ability of competitors to import fuel through the port and impair competition in some fuel markets, including gasoline.

“Alaska has some of the highest fuel costs in the country. With the loss of Flint Hills, our goal in requiring the sale of Terminal 1 is to increase and encourage competition for the sale of fuel by bringing a new competitor into this market,” Alaska Attorney General Jahna Lindemuth said in a statement. “We are happy to see that Petro Star, the only other commercial refiner in Alaska, will have an opportunity to expand into Southcentral Alaska and provide new competition for fuel.”

- KRISTEN NELSON