NEW YORK Feb 7 A surge in oil production from
the giant Bakken formation has spawned plans for a second new
refinery in North Dakota as companies seek to take advantage of
MDU Resources and Calumet Specialty Products
Partners said on Thursday they will jointly build and
operate a 20,000 barrel a day (bpd) refinery in Dickinson that
will run Bakken oil to produce diesel fuel. The joint venture
will be called Dakota Prairie Refining LLC.
"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
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.
MDU is in the oil and gas, utilities and construction
businesses but not yet in refining. Calumet produces chemicals
and runs one petroleum refinery in Superior, Wisconsin.
Their statement did not make clear whether the refinery had
cleared all the necessary regulatory approvals and permits and
the two companies could not be reached by telephone.
However, North Dakota Governor Jack Dalrymple said "the
development of another oil refinery has been a longtime goal of
our state and with this project we are achieving that goal,"
according to the companies' statement.
The Bismarck Tribune reported on Feb. 2 that Dakota Oil
Processing had received a permit for its refinery and that there
had been no complaints against the MDU/Calumet plan ahead of a
deadline earlier this week.