July 19, 2012:

The opinion piece by Shannyn Moore in the Sunday, July 15 edition of the Daily News was inaccurate, unfair and misleading. As our employees and the Fairbanks community know, the Flint Hills Resources refinery in North Pole has not been thriving on profits. We are in the process of idling the second of our three crude units because of three economic challenges that threaten the future of our refinery. Those challenges are the exceptionally high costs of crude, energy and the "quality bank."

Flint Hills has only one source of crude to refine: royalty oil owned by the state of Alaska and flowing down from the North Slope in the trans-Alaska pipeline. Other North Slope producers need their oil for refining operations on the West Coast. For the past year, Alaska North Slope crude, or ANS, has been trading at a significantly higher price than other U.S. crudes, in particular West Texas Intermediate, or WTI. The premium for ANS over WTI has ranged from about $15 a barrel to a high of nearly $30 a barrel in October 2011. This is 36 cents to 71 cents a gallon more for ANS than WTI. In addition, the state of Alaska charges Flint Hills a premium for the crude. In 2011, the premium amounted to $11.6 million above the amount the state received for the rest of its royalty oil. Flint Hills does not have access to natural gas to provide heat and energy for refining. After the cost of crude, energy is our second-biggest expense. Flint Hills must refine ANS crude into a product similar to gasoline just to provide energy for the refinery. As a result, our energy costs are about three times higher than for refineries with access to natural gas. In addition, the electrical rates at the refinery are three or more times higher than those paid by most U.S. refineries.

A final factor that drives up the refinery's energy costs is the temperature of crude coming into the refinery. In the early 1990s, crude arrived at the refinery at a temperature around 110 degrees F. This past year, incoming crude has at times come in at less than 40 degrees F. Lower temperatures are a result of lower oil volumes in the pipeline. The effect is that Flint Hills has to use considerably more energy to heat the crude to the 600-plus degrees required by the refining process. A final cost borne by Flint Hills but not other U.S. refineries is the "quality bank." Because Flint Hills does not refine the entire barrel of crude that comes through the refinery, it must re-inject a portion of the refined crude back into the pipeline. Flint Hills pays for the ability to do that, an expense that our competitors do not bear. Flint Hills is working diligently to address these economic challenges. For example, we are working on a natural gas trucking project to bring less expensive energy to the refinery. And we recently completed a project to recover more heat from the processed crude. Our company and its employees do not ask for subsidies or special treatment, but we do ask that the facts not be misrepresented as we work to secure a future for our refinery in Alaska. Jeff Cook is the regional director of external affairs for Flint Hills Resources Alaska, North Pole refinery.

By adn.com

July 19, 2012:

MANAMA: Bapco has achieved an incident and injury free record in refining for the first half this year. "Bapco has successfully complied with the vision of 'striving for excellence' and has been achieving excellence as shown in the records during this period," said chief executive Gordon Smith. "The company celebrated five million man-hours without a lost injury time," he added. "This means that all of the Bapco and contractor employees who have attended work within Bapco facilities have been able to return home without significant injury for the last 230 days. "The company's next target is 8m man-hours," Mr Smith said. Bapco's major capital investment project, the Waste Water Treatment Project (WWTP) also achieved an additional 2m man-hours without a lost time injury, he added.

"This is a tremendous achievement considering the high risk activities that are being carried out in constructing a new facility. "The strong safety record is not due to luck, but rather to the strong safety culture within the organisation, as well as decades of development in the health and safety standards and procedures. "The significant health and safety successes are set against a backdrop of high refinery onstream factor," he added. The refinery has processed over 800,000 barrels of crude above the business plan budget. "This is a testament to the hard work, diligence and dedication of all Bapco staff and contractors, in ensuring that the refinery processed safely the maximum possible crude rate, Mr Smith added.

By Gulf-Daily

July 19, 2012:

BELLINGHAM, Wash. — Crude oil from Montana and North Dakota may be delivered by rail to the BP Cherry Point refinery near Blaine. Company spokesman Mike Abendhoff told The Bellingham Herald Wednesday ((http://is.gd/k6JtgI) that BP officials are talking with Whatcom County planning officials about $60 million worth of rail improvements to accommodate oil trains. If the project becomes a reality, a train a day of tanker cars may deliver oil to the refinery. Abendhoff says the company will likely decide within 60 days whether to proceed with the project and apply for permits.

By The Seattle Times

July 18, 2012:

U.S. oil refiner Western Refining Inc doubled its quarterly dividend and authorised an up to $200 million share buyback, citing reduced debt and confidence in sustaining current margins. The company in May posted a higher first-quarter adjusted profit, helped by higher margins and output at its largest refinery at El Paso, Texas. Western Refining said it will buy back shares to address potential shareholder dilution related to its convertible notes which mature in 2014. The company said it will pay a third-quarter cash dividend of 8 cents per share, payable on Aug. 13 to shareholders of record as of July 27. Shares of Western Refining, which have almost doubled in value over the last eight months, closed at $24.83 on the New York Stock Exchange on Tuesday.

By Reuters

July 18, 2012:

Canadian oils surged as refiners in Alberta and Illinois returned plants to service and as rail shipments of petroleum increased. Marathon Petroleum Corp. is starting units after planned work at its Robinson refinery in Illinois, Jamal Kheiry, a Findlay, Ohio-based spokesman, said in a telephone interview yesterday. Imperial Oil Ltd. (IMO)’s Strathcona refinery in Alberta completed maintenance and has returned to normal operations, Jon Harding, a company spokesman, said yesterday. Canadian rail freight car loads of petroleum products rose 45 percent from a year ago to 5,934 in the week ended July 7, Association of American Railroads data shows. Syncrude strengthened $3.65 to a $2.50 premium to West Texas Intermediate at 2:39 p.m. in New York, according to data compiled by Bloomberg. It’s the highest level the grade has traded at this year. Syncrude is a synthetic oil upgraded from tarlike bitumen in Alberta into refinery-ready crude.

Western Canada Select’s discount narrowed $3 to $13.75 a barrel below WTI, the smallest gap since May 1. Bakken oil was steady at $3.25 below the U.S. benchmark. Light Louisiana Sweet’s premium to WTI decreased 45 cents to $17.70 a barrel. Heavy Louisiana Sweet lost 60 cents to $17.25 over. Poseidon’s premium decreased 70 cents to $12.80 a barrel, while Southern Green Canyon lost 90 cents to $12.10 over WTI. Mars Blend decreased 70 cents to $13 a barrel over the U.S. benchmark. Thunder Horse, a sour crude with lower sulfur content than Mars, Poseidon and Southern Green Canyon, decreased 85 cents to a $16 premium.

By Bloomberg