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SALT LAKE CITY, Utah -- Flying J Inc. has put its crude-oil refinery in North Salt Lake City up for sale -- a step it hopes will generate additional cash to help hasten the company's emergence from Chapter 11, The Salt Lake Tribune reported.
The refinery, however, is one of roughly 10 such facilities now on the market nationwide, according to Ann Kohler, an analyst who covers the nation's oil refining industry for Caris & Co. in New York. "Only time will tell if they can find a buyer," she said.
The nation's oil-refining industry is suffering from some of the poorest market conditions since the 1990s with demand for gasoline and diesel fuel slumping due to the nation's continuing recession, according to the Tribune report.
"If they [Flying J] want to sell, it may have to be at a discount from the price they would have gotten when the market was a lot stronger a few years ago," Kohler added.
Ogden, Utah-based Flying J filed for reorganization under Chapter 11 provisions of the U.S. Bankruptcy Code on Dec. 22, 2008. Since then, the company has sold its Longhorn pipeline in Texas; put its oil refinery in Bakersfield, Calif., up for sale; and announced that it intended to merge its truck stops with Pilot Travel Centers.
"Listing our North Salt Lake refinery for sale is one of many avenues we are pursuing in an effort to emerge from bankruptcy," Virginia Parker, Flying J's director of marketing, said in an e-mail. The process of selling the refinery is still in its infancy, and it may be several months before a transaction is completed. She added the sale of the Bakersfield refinery is progressing, and Flying J is optimistic that a "resolution" is close at hand.
Utah Petroleum Association President Lee Peacock told the newspaper he doubts Flying J will have much of a problem with finding a buyer. "There is a need for the products that refinery produces," he said. "And with demand [for gasoline] growing in the [Salt Lake] valley and the state, in all likelihood someone will continue to operate it."
The Flying J refinery, which is capable of refining approximately 30,000 barrels of crude oil each day, is one of five refineries operating in Utah. The others are operated by Holly Corp., Tesoro, Chevron and Silver Eagle, the report stated.