Northwest Digest

Wire reports

Posted: Monday, December 06, 2004

Producers, refinery reps negotiate

FAIRBANKS - A meeting was held between major oil companies and refineries operating in Alaska to try and settle a dispute over back payments to the trans-Alaska pipeline system quality bank.

The payments, ordered in August by an administrative law judge with the Federal Energy Regulatory Commission, go back 11 years and could put millions of dollars into state coffers, but would be a blow to Alaska's home-state refining company, Petro Star Inc.

The dispute involves hundreds of millions of dollars, including tens of millions potentially owed to the state of Alaska's treasury.

If the issue is not resolved fairly, it could put Petro Star into bankruptcy, Sen. Ted Stevens, R-Alaska, said last week.

"The question is the survivability of this refinery that is owned by an Alaska Native corporation," he said. Petro Star is a subsidiary of Arctic Slope Regional Corp.

The meeting last week in Washington, D.C., was prompted in part by language Stevens placed in a report accompanying the omnibus spending bill for the current federal fiscal year.

"Initially there will be an information exchange and then the parties will sit down over the next few months to see if the basis for a settlement exists," said John Katz, director of Gov. Frank Murkowski's office in Washington.

Stevens' legislative statement expresses "concern" about the Aug. 31 administrative law judge's ruling.

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