07-02-2013

MDU Resources Group and Calumet Specialty Products partners announce diesel refinery JV

MDU Resources Group and Calumet Specialty Products Partners, 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.

“Through this joint venture we are continuing to expand both our midstream energy business and our vertically integrated investment in the Bakken oil play,” said David L. Goodin, president and chief executive officer of MDU Resources. “There is a strong existing market for the plant’s production. Southwestern North Dakota also will benefit from the plant’s good-paying, long-term jobs and from the two companies’ longstanding commitment to the communities in which they operate and serve.

“All of our major businesses within MDU Resources have the potential to participate in this project,” Goodin said. “This demonstrates the strength of our business model, in which businesses with diversified capabilities work together to provide value-added benefits.”

“This joint venture allows us to continue our plan of diversifying into geographies with favorable feedstock options and niche product markets,” said Jennifer G. Straumins, president and chief operating officer of Calumet’s general partner. “North Dakota is experiencing rapid growth, and we’re excited to join arms with a well-respected company like MDU to help provide solutions to the region.  The state of North Dakota has been a pleasure to work with, and many opportunities lie ahead for everyone involved here.”

“The development of another oil refinery has been a longtime goal of our state and with this project we are achieving that goal,” Gov.  Jack Dalrymple said. “The decision by MDU Resources and Calumet to move forward on a new diesel refinery is good news for North Dakota and the entire nation. This project will be built by the private sector. It will create more jobs, it will help to further diversify our economy and it will increase the region’s supply of diesel fuel. Our Department of Commerce will continue working with MDU and Calumet to move this project forward.”

Goodin and Straumins expressed appreciation for the support this project has received from the state of North Dakota.

“We appreciate the help of the state’s agencies and officials to identify issues and help solve problems that are involved in a complex project such as this,” Goodin said. “We also appreciate North Dakota challenging us with a rigorous permitting process that will help ensure this state-of-the-art facility operates responsibly and safely, and becomes an important contributor to the local and state economy.”

The facility’s engineering and plant design are in the final stages. Westcon has been selected as the general contractor, and Ventech Engineering will be the primary equipment and technology provider. MDU Resources’ construction businesses, Knife River Corporation and MDU Construction Services Group, are among potential subcontractors. Other MDU Resources’ companies involved in the project include Fidelity Exploration and Production Company, which will supply some of the facility’s crude oil; WBI Energy, which will supply natural gas service to operate the facility; and Montana-Dakota Utilities, which will supply the facility’s electricity needs.