Saturday, April 7, 2012

Update: Three New Refineries in North Dakota

Updates

June 29, 2012: Stark County approves rezoning for the new Dickinson refinery

Original Post
Link here to Bismarck Tribune.

North Dakota consumes 1.5 million gallons of diesel/day; up 70 percent in past five years -- not just oil industry, but farming industry.

Data points:

Three Affilitated Tribes oil refinery
  • June 1, 2012, update here
  • on the Fort Berthold reservation
  • --> diesel
  • 15,000 bbl/day
  • it actually has a permit....from.... the ....drum roll ... EPA
  • furthest along of the three proposed refineries
  • it has been "in the works" for eight (8) years
  • [way down in the article, this little, "oh by the way" -- waiting for final clearance from the EPA -- who wudda thought? it turns out some of the local residents appealed the EPA permit when the tribe changed source of oil from Canadian oil to Bakken oil;  permit is now being re-evaluated; don't hold your breath]
  • financing to pay over 20 years; now asking whether it will be a "money maker" -- after eight years of working on this -- I guess it's as good a time as ever to ask whether the refinery will make money
Dakota Oil Processing
  • Website here; includes a Fact Sheet; suggests breaking ground in 2012; operational late 2013;
  • --> diesel
  • 20,000 bbl/day
  • near Trenton, southwest of Williston
  • a close second to TAT oil refinery; has air quality permit from health department [with the TAT permit held up by appeal, DOP may be first of the three]
  • needs water treatment permit
  • hopes to break ground this summer; be on line by end of next year (2013)
  • $200 million project
  • 100 workers to build it; 40 - 50 temporary housing units
WBI Energy: MDU Resources/Calument Refining joint venture
  • update, June 28, 2016: $430 million; way over budget; MDU buys Calumet's 50% stake on June 27, 2016, and then announces sale of entire refinery to Tesoro on June 28, 2016; sold for $10 million cash and transferring $66 million in debt 
  • update, June 29, 2012: zoning approved; 274 acres; $325 million; 100 employees when operational;
  • update, May 16, 2012; open mtg; scouted a 200-acre plot of land about five miles southwest of Dickinson on 116th Avenue Southwest.
  • early planning stages
  • near Richardton / Dickinson (don't hold your breath, especially if it means lots of men living together)
  • along the BNSF railway
  • $250 million for a modular unit; $410 million for a "stick built" project
  • 20,000 bbl/day 
  • only state permits will be required
Tesoro Refinery, Mandan, ND
  • increasing capacity by 10,000 bbls to 68,000 bbls/day

7 comments:

  1. Most likely it is pure coincedence that this report on new small refineries, was posted just after the following reports on how North Dakota Honey Producers lead the nation, not only this year, but on a frequent annual basis.

    ND Honey Producers are more likely to have a cost of production that enables them to make a profit nearly every year, irrespective of any one years honey price level. By contrast, I doubt that these 3 new "botique" refineries will have the volume necessary to achieve a low enough cost level, that will enable them to make a profit in years when their prices fall.

    The small refineries remind me of all the smaller ethanol plants that have already failed.

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    Replies
    1. That may be true (long term profitability).

      But in the meantime, it provides jobs for construction workers, lawyers, and EPA bureaucrats; and, if the refineries ever go on line, diesel fuel should come down in price for area farmers and truckers supporting the local oil industry.

      In addition, it will take trucks off the road hauling diesel between the Tesoro Refinery in Mandan and northwestern North Dakota.

      Whether they fail or not, at least they are not being mandated by the federal government or subsidized by same.

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    2. Good articles on the Bakken oil transportation system and refineries on the "rbn energy" website. This website is maintained by a professional oil and gas marketer. Always good info with graphs at this site.

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    3. Thank you. I just went to it. First impressions: excellent. I noted the site in a stand-alone post so others will find it. Again, thank you.

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    4. The comment: the small refineries remind me of the smaller ethanol plants that have already failed.

      Another good example can be found here: http://www.forbes.com/sites/williampentland/2012/04/07/clean-energys-pursuit-of-an-empty-prize/?partner=yahoofeed

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    5. I think 2 of the developers have thought their new refineries out well. The refinery near Williston and the one near Dickinson will produce only diesel, which is extremely in high demand in western North Dakota. They will have no problems selling their diesel within western ND. The refinery near New Town however, would produce gasoline. There is greater competition in selling that, since their isn't a shortage of gasoline in ND, but there is definitely a shortage of diesel in western ND.

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    6. I did not know that about the New Town refinery, but if accurate, I have to agree with you 100%. It seems that producing one product, diesel, in this case, would be most profitable.

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