Flying J Inc. has agreed to sell its 66,000-barrel-a-day Bakersfield refinery to Paramount Petroleum Corp., a division of Alon USA Energy Inc., if that firm is the successful bidder in an upcoming bankruptcy auction.
Flying J, based in Ogden, Utah, filed for Chapter 11 bankruptcy protection in December 2008 after oil prices tumbled from record-high levels and credit markets dried up.
Since then, the refinery operated by subsidiary Big West of California has struggled to keep operating and to maintain a regular supply of crude for processing. A year ago, refinery operations were suspended indefinitely, costing about 175 jobs.
The sale might change the facility's fortunes, although it was unclear who would emerge as the bidding winner and what the final price would be. Flying J's agreement with Alon, which was reached Tuesday, merely gives Alon "stalking horse" privileges. That means it gets to make the first bid when the auction begins.