Parnell signs Flint Hills royalty oil bill

Alaska Gov. Sean Parnell has signed legislation extending state royalty oil sales to the Flint Hills Resources refinery at North Pole, near Fairbanks.

Parnell signed Senate Bill 86 into law during a June 11 visit to the refinery.

“Extending the state’s contract with Flint Hills Refinery is good for the Interior and good for Alaska,” Parnell said in a press release. “Many industries across Alaska rely on the fuels that Flint Hills produces, and the extension of this contract will keep Alaska’s economy growing.”

Passed unanimously

The Alaska Legislature passed SB 86 unanimously. Legislative approval was required to execute the new five-year contract the Parnell administration had negotiated with Flint Hills.

The contract will follow an existing 10-year contract that expires on March 31, 2014.

Under the new contract, the state will supply 18,000 to 30,000 barrels per day of royalty crude to Flint Hills.

Royalty oil is the state’s share of the oil that companies produce from leased, state-owned land. The refinery draws North Slope crude from the trans-Alaska pipeline, which passes nearby.

The North Pole refinery is the state’s largest, producing predominantly jet fuel.

Flint Hills is a subsidiary of Koch Industries Inc. of Wichita, Kan.

—Wesley Loy