MDU and Calumet Announce Diesel Refinery Joint Venture

Company's update on the progress of this project, undated but must be near completion. 

Yahoo!Finance is reporting that:

MDU Resources Group, Inc.  and Calumet Specialty Products Partners, L.P. today announced that they have formed a joint venture to develop, build and operate a diesel refinery in southwestern North Dakota. The joint venture will be called Dakota Prairie Refining, LLC.

MDU Resources Group’s participation in the joint venture will be through its wholly owned subsidiary, WBI Energy, Inc.

The facility will process 20,000 barrels per day of Bakken crude oil. Construction could begin this spring, and is expected to take up to 20 months. The plant will be located on a 318-acre site located west of Dickinson in Stark County, N.D. It will employ approximately 100 people. Hiring and training of operating personnel is expected to begin in 2013. The plant will employ its own plant manager and management team, who will report to a governing board composed of representatives of WBI Energy and Calumet.

An earlier post will help you locate the new site on Google maps and its relationship to a crude-by-rail oil loading terminal.

Reuters reports the story, also. 

"Construction of the refinery could begin this spring and is expected to take up to 20 months," the two companies said in a statement, adding that the engineering and plant designs were in their final stages.

Oil production in North Dakota has jumped to 730,000 bpd from just over 100,000 bpd in 2006, primarily due to Bakken output, making it the second-largest oil-producing state after Texas.

The abundant supply has depressed crude prices, reinvigorating business for refiners that can access the crude, primarily in the Midwest.

Diesel demand in the state has soared along with shale development due to huge consumption by trucks coming to and from the Bakken fields, prompting a company called Dakota Oil Processing in 2011 to announce plans to build and operate an identically-sized refinery also producing just diesel in Williston, about 100 miles north of the Dakota Prairie plant. A 20,000 bpd refinery is modest, and only two refineries of such a size have been built and opened in the United States in the past 35 years - both in Alaska.

Update, added February 8, 2013, 10:03 a.m.:

For newbies: anything indented following a linked article is a "cut and paste" from the linked article. It is not my original writing. It is from the linked article.

I point this out because someone noted that the last paragraph above (in the indented portion) implies that Dakota Oil Processing was "late" to the scene, coming in after MDU-Calumet began the process of building a diesel refinery in North Dakota.

In fact, it was just the opposite to the best of my knowledge. I happened to meet, entirely by accident, one of the early program managers for the Dakota Oil Processing plan for their Trenton (near Williston) diesel refinery. DOP was one of the early ones to notice that diesel was in very, very short supply in the Bakken.

So, for the record, and for the archives, it is my understanding that DOP led the way for a diesel refinery in the Bakken.

By the way, I think the blog reflects that, also: stories about the Trenton refinery were posted a lot earlier than the MDU refinery story.

And, of course, somewhere in the mix is the Fort Berthold refinery which has been on the drawing board since General Custer first rode through the area.