22-02-2012

MDU resources & affiliates of Calumet specialty products plan to study diesel refinery JV

MDU Resources Group, Inc through its wholly owned  subsidiary, WBI Holdings, Inc. and Calumet Refining, LLC, an  entity owned by the existing owners of the general partner of Calumet  Specialty Products Partners, L.P. today announced they have signed a nonbinding letter of intent to  explore the feasibility of jointly building and operating a 20,000  barrel per day diesel refinery in southwestern North Dakota. The  facility would process Bakken crude and market the diesel within the  Bakken region.

Site selection, permitting, crude oil feed procurement, marketing and  engineering studies are currently underway. Upon successful completion  of the project, Calumet Refining, LLC expects to contribute its interest  in the joint venture to Calumet in exchange for cash and/or partnership  interests.

“This project will capitalize on the capabilities and expertise of two  strong companies to develop a facility that will serve demand for diesel  by agriculture and industry in the rapidly developing Bakken play,”  said Terry D. Hildestad, president and chief executive officer of MDU  Resources. “We believe this joint venture will add value to  Bakken crude. It will provide value to southwestern North Dakota  communities by providing steady, good-paying, long-term jobs and through  the two companies’ longstanding commitment to the communities in which  they operate and serve.”

“We are excited that the owners of our general partner are partnering  with MDU Resources and WBI to explore refining opportunities in the  Bakken,” said Jennifer G. Straumins, president and chief  operating officer of Calumet’s general partner. “We believe that our  refining capabilities and their operating experience in the Bakken would  be a strong combination. Both companies provide operational expertise  and capability vital to the success of a large industrial project  similar to this planned facility.”

Hildestad said the project exemplifies the potential that exists for all  of the major subsidiary companies within MDU Resources to participate in  a value-added project in the Bakken region and elsewhere.
 
“Bakken crude is expected to be sourced, in part, by our oil and natural  gas production company, Fidelity,” he said. “There may be opportunities  for the facility’s natural gas and electric generation needs to be  provided by Montana-Dakota Utilities. The company’s construction  companies are also capable of providing materials and services required  to build the facility.”