FAIRBANKS - The state is negotiating with a potential buyer of state royalty oil for use at the Williams refinery in North Pole, Gov. Frank Murkowski said.
Flint Hills Resources of Wichita, Kan., is negotiating with Williams to purchase its refinery and other assets in Alaska, Murkowski announced this week.
"We have decided to enter into negotiations under the assumption there (will be) a contractual agreement very shortly," Murkowski said. "They have been negotiating for some time and the assumption is that this sale is likely to go to a contractual commitment."
Representatives of Flint Hills and Williams, which owns a gas station and convenience store in Juneau, declined to comment.
Facing billions in debt, Williams has been trying to sell all its Alaska properties, which include the North Pole refinery, two oil terminals, 29 Williams Express stores and a 3 percent interest in the trans-Alaska oil pipeline, for the past year. The refinery employs roughly 150 people, while about 25 more work for Williams Alaska in Anchorage. Statewide, the Williams convenience stores employ about 300 people.
Last week in Anchorage, Murkowski met with representatives of Flint Hills and Williams to discuss the royalty oil contract for the refinery, which delivers about 70,000 barrels per day of state oil.
Murkowski said the new contract would include a number of requests and demands from the state, the most significant being a requirement that the wholesale prices of jet fuel and gasoline be the same in Alaska's two largest cities.
Murkowski said he hopes to decrease the retail gas price disparity between Anchorage and Fairbanks - gas is often considerably cheaper in Anchorage - by fixing it on the wholesale end.