Military awards contracts to Alaska refineries

Posted: Thursday, September 04, 2003

FAIRBANKS (AP) Owners of two North Pole oil refineries have won roughly $90 million in contracts to provide jet fuel to Alaska's military, according to the Department of Defense.

The Defense Energy Support Center awarded a $61.5 million contract to Alaska-owned Petro Star and a $28 million contract to Williams Alaska Petroleum.

''It's about half of our jet fuel market, so it's a very significant contract for us,'' said Jim Boltz, chief operating officer for Petro Star, which owns refineries in North Pole and Valdez.

The size of the one-year contracts can fluctuate with changes in the bulk jet fuel market.

In Fairbanks, Petro Star owns distribution company Sourdough Fuel and nine retail outlets. It is a wholly owned subsidiary of Arctic Slope Regional Corp.

The Anchorage company will supply Eielson Air Force Base and Fort Wainwright with about 18 million gallons of fuel from its North Pole refinery and about 35 million gallons to Elmendorf Air Force Base and Fort Greely from its Valdez facility, Boltz said.

Williams Alaska Petroleum owns a North Pole refinery, two oil terminals, 29 Williams Express stores and a 3 percent interest in the trans-Alaska oil pipeline. The cash-strapped company is trying to sell its Alaska holdings, and in August Gov. Frank Murkowski said Williams was negotiating a sale with Kansas-based Flint Hills Resources.

The Defense Energy Support Center contracts are competitively bid each year, said Lynette Ebberts, the center's chief of corporate communications.

The fuel needs of Alaska's military are expected to change after Fort Wainwright completes its transformation to a Stryker Brigade.

''There will be an increased requirement for fuel for the (vehicles) within the Stryker Brigade. You're talking about the Stryker vehicles and all the support vehicles,'' said Maj. Dan Hunter, Stryker Brigade transformation team spokesman.

The fleet will begin with about 270 Stryker units and expand over several years, eventually reaching 333 vehicles, Hunter said. With eight wheels and a Caterpillar diesel engine, the 19-ton armored Stryker vehicles get 5.7 miles to the gallon.

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