Williams sells refinery, stores for $265 million
TULSA, Okla. - Williams Cos. has agreed to sell an Alaska refinery, an interest in the trans-Alaska pipeline and 26 convenience stores in Alaska for $265 million cash, the company announced Monday.
Two Wichita-based Koch Industries units, Flint Hills Resources and Koch Alaska Pipeline Co., are buying the refinery in North Pole, and Williams' 3.0845 percent interest in the pipeline, respectively. Bloomington, Minn.-based Holiday Companies is buying the Alaska convenience stores.
The deals are expected to close in the first quarter of 2004, pending regulatory approval and approval by the Alaska Legislature of Flint Hills' crude oil supply contract with the state of Alaska.
Williams has sold more than $8 billion in assets since December 2001 in a restructuring plan designed to improve its balance sheet and to refocus on finding, producing, processing and transporting natural gas.
"We've taken command of our finances and our future," Williams chairman, president and chief executive Steve Malcolm said. "Our asset sales have served to build a healthier Williams. We have recently completed the early retirement of $950 million in debt."
Shares of Williams were up 8 cents to close at $9.16 on the New York Stock Exchange.
The Alaska refinery was put up for sale in June 2002 along with the Tulsa-based company's Memphis refinery in hopes of raising $1 billion.
Greenwich, Conn.-based Premcor Inc. bought the Tennessee refinery for $465 million a year ago, but the Alaska refinery proved harder to sell. Fewer refiners were interested in entering the Alaska market, Malcolm has said.
The 220,000-barrel-per-day refinery marks Flint Hills' entrance into the vast Alaska oil market. The limited partnership already has refineries with combined capacity of 600,000 barrels per day in Rosemount, Minn., and Corpus Christi, Texas.
"Flint Hills Resources is excited about becoming a part of the Alaska community and its energy sector," president Dave Robertson said. "We look forward to bringing cleaner-burning fuels to Alaskan consumers."
State officials are currently negotiating with the companies for a 10-year agreement on Alaska's royalty share of oil, said John Manly, press secretary for Gov. Frank Murkowski.
Murkowski has said he wants a contract that would decrease the disparity in gas prices between Anchorage and Fairbanks, the state's two largest cities. Gas in Anchorage is typically less expensive.
"That was one of the things the governor wanted them to consider when they went into the negotiations," Manly said.
But no agreement has been reached with the companies and the state, Manly said.
"Right now, everything is subject to negotiation," Flint Hills spokesman Allan Wright said from Fairbanks. "The sale is contingent upon us reaching an agreement on crude supply."
The purchase will require approval from the Federal Trade Commission, Regulatory Commission of Alaska and the Alaska Department of Natural Resources.
Privately held Koch's purchase into the 800-mile trans-Alaska pipeline system is also subject to preferential purchase rights of other owners in the critical transport system from Prudhoe Bay to the port of Valdez.
With the convenience store purchases, Holiday Companies will have 276 Holiday Stationstores in 12 northern states.