Oct. 21 (Bloomberg) -- Flying J Inc., the bankrupt oil refiner and transporter, said it retained Deutsche Bank AG to sell its Utah refinery.

The company is “several months from a deal” on the refinery, Chief Executive Officer Crystal Maggelet, said today in an e-mail. The refinery is owned by Big West Oil LLC, a subsidiary of Flying J. There are five refineries in Utah.

The plant may sell for $38 million based on its capacity and complexity, Ann Kohler, an analyst at Caris & Co. in New York, said in a telephone interview. Utah refineries have lagged behind performance of other Rocky Mountain plants, where an abundance of oil has boosted margins, she said. The plant may be sold for a premium because of its Rocky Mountain location, she said.

Ogden, Utah-based Flying J filed for bankruptcy on Dec. 22. Since then, the company has sold assets to raise cash. In June, Flying J announced that it would sell its Longhorn pipeline in Texas to Magellan Midstream Partners LP. Then in July, the company said it would merge its truck stops with Pilot Travel Centers LLC.

While Frontier Oil Corp. is the only U.S. refiner that has expressed interest in buying a refinery in the Rocky Mountains, Chief Executive Officer Mike Jennings said in August he’s focused on growth in Montana or Wyoming. Houston-based Frontier can tap heavy-crude supplies from Canada that are more expensive to ship to more distant parts of the U.S.

Holly Pipeline

The Salt Lake City-area refineries will be able to feed product into a new pipeline that Holly Corp. is building from Salt Lake to Las Vegas.

“Historically, you had seen very strong demand growth in Vegas,” Kohler said. “I would assume that was largely a reflection of the overall economy.”

Flying J also retained Deutsche Bank to sell its shuttered Bakersfield, California, refinery. The Utah refinery is operating and can process 30,000 barrels per day, according to the U.S. Energy Department.

To contact the reporters on this story: Jordan Burke in New York at jburke29@bloomberg.net; To contact the reporters on this story: Jessica Resnick-Ault in New York at jresnickault@bloomberg.net

Last Updated: October 21, 2009 13:02 EDT