Tesoro’s pending acquisition of Flint Hill’s fuel distribution and marketing operations in Fairbanks, North Pole and Anchorage, will streamline the transportation of refined petroleum products from Southcentral to the Interior.
Tesoro Vice President of Strategy and Business Development Nate Weeks told the Fairbanks Economic Development Corporation’s Energy Task Force Friday that access to the railroad out of Anchorage is key.
“We currently serve customers with trucks in the Interior and that’s a long haul in good weather,” Weeks said.
Weeks does not expect the change will lower retail prices, citing factors out of Tesoro’s control including the crude oil market and retail competition.
“I don’t see anything that would tell me it wouldn’t be anything but neutral,” he said.
Weeks says Tesoro plans to open up use of Flint Hill’s previously exclusive loading and distribution facilities to competing companies.
“When we buy a terminal, we think the best use of the terminal is to optimize it, fill it up,” Weeks said. “Our strategy is for all of our logistics assets to open them up to third parties. I will say we have not worked out how we’re gonna do that yet.”
It’s unclear who the other fuel suppliers might be. Tesoro runs a refinery in Kenai. Alaska’s other refineries are Petro Star facilities in North Pole and Valdez, and 2 operated by oil producers on the North Slope. Refined fuels can also be shipped in from outside Alaska. Tesoro’s purchase and lease of Flint Hills infrastructure does not include the shuttered North Pole refinery.
“Our view is Flint Hills is a great operator,” Weeks said. “We see what they do across the company; they are a very good company, and if they couldn’t make it work, we don’t see why we could make it work.”
Weeks pointed to lack of low cost natural gas to power the facility as key, downplaying the impact of sulfolane contamination at and around the North Pole crude oil processing plant, noting that most refineries have historic environmental contamination issues.
Tesoro’s acquisition of Flint Hills fuel distribution and marketing assets is expect to close in the next 2 months.
Dan Bross is a reporter at KUAC in Fairbanks.
