Flint Hills investing $23 million to supply clean fuels to Alaska

Flint Hills Resources Alaska LLC is investing $23 million to supply Alaskans with low sulfur fuels, the company has just announced. The investment will enable Flint Hills to fulfill its royalty oil contract obligations with the state for providing clean fuels, the company said Nov. 22.

$15 million will go to Tesoro Corp., to partly fund a $45 million construction project for a distillate desulfurization unit at Tesoro’s Kenai refinery — in return Tesoro will supply Flint Hills with up to 6,000 barrels of low sulfur gasoline and diesel per day, for Flint Hills to supply to its customers. Flint Hills will use the remaining $8 million to enable its own fuel terminals to handle the low sulfur fuels.

“With Tesoro we are addressing community needs for a ready supply of low sulfur fuels, in the most economically appropriate manner,” said Todd Craig, vice president of Alaska marketing for Flint Hills. “We will be producing low sulfur gasoline at our North Pole refinery and will move additional low sulfur fuels through our facilities in North Pole and Anchorage, including potentially from waterborne sources.”

Flint Hill Resources LP, the parent company of Flint Hills Resources Alaska, has also announced an expansion of its Texas fuel storage and transportation capacity. The company will also increase its Minnesota refining capacity by 50,000 barrels per day, its Wisconsin pipeline capacity by 10,000 barrels per day and its Texas pipeline capacity by 30,000 barrels per day.

—Alan Bailey