In a state boasting some of the heaviest over-the-road trucking activity in the nation, the creation of a diesel refinery plant could be just what the western side of the state of North Dakota needs to help quench the insatiable thirst the area has for diesel fuel.
As the demand for diesel fuel continues to be stretched passed the limits of local capabilities, two companies are taking part in a joint venture and making plans to help meets diesel consumption needs, while creating sustainable jobs in the Dickinson, N.D., area.
MDU Resources Group, of Bismarck and Calumet Specialty Product Partners, of Indianapolis, Indiana, have announced that Dakota Prairie Refining, is set to become operational in late 2014, and will be capable of producing 20,000 barrels of Bakken crude oil and other hydrocarbons each day. Crude will be transported by pipeline to the facility where approximately 7,000 barrels of diesel will be made and used in North Dakota.
The goal is to keep as much product in the region as possible.
Ground breaking is set for April with construction expected to take about 20 months. The refinery will sit on a 318-acre site located four miles west of Dickinson, directly south of Interstate 94.
The plant’s construction is expected to cost between $280 million and $300 million.
“This site was chosen specifically because of its close proximity to the railroads, roads, electricity, natural gas lines, water and sewer,” said Rick Mattleson, Director of Communications and Public Affairs for MDU.
Once operational, the 24/7 refinery will sustain about 100 jobs and create between 400 and 500 during the peak construction phases. Mattleson said the large amount of construction employees will also bring revenues into the economy as they utilize local services and new community members will add to the tax base.
The project’s ability to move forward is contingent on approval of an air quality permit from the North Dakota Department of Health. The application and public comment process has already taken place.
Dennis Johnson, City Mayor said he is excited about the potential economic impact the refinery will have on Dickinson. “This will create good paying, sustainable jobs that are not subject to the ups and downs of the price of oil. It may also create spill-off jobs and entice incoming businesses to come here because of the refinery,” Johnson said.
To alleviate traffic in Dickinson and accommodate for truck flows, the North Dakota Department of Transportation is considering an additional off ramp located off Interstate 94 that will allow the truck route to tie directly into the Interstate. It will tentatively be called Exit 56. “I think the collaboration between the city and the state for this project will help provide an impetus for the state to help them with getting the bypass built and other restructuring needs,” Mattleson said.
Dickinson is currently building a waste water treatment plant that is on tap for completion around the time the refinery will also be completed. It will supply approximately 175,000 gallons of grey water to the refinery for its daily use but will be capable of producing between three and four million gallons daily. Of the water supplied to the refinery, many of those gallons will be recycled through the system.
The plant is expected to emit 125,000 tons per year of carbon dioxide but will utilize the most advanced emissions-control technology available.
Gov. Jack Dalrymple has met with officials from MDU Resources and Calumet to discuss the refinery and told them the state would continue to assist them throughout the planning process.
“The development of another refinery has been a long-time goal of our state and with this project we are achieving that goal. The decision by MDU Resources Group and Calumet to move forward on a new diesel fuel refinery is good news for North Dakota,” the Governor said.
The Tesoro Refinery in Mandan is currently the only refinery located in the state and is capable of processing some 68,000 barrels per day.
Current demand for diesel in North Dakota is estimated at 53,000 barrels per day and is expected to increase to 75,000 barrels per day by the year 2025.
Mattleson said MDU has spent a considerable amount of time forging its strong partnership with Calumet and is also ensuring the project meets all of the state’s regulatory guidelines and requirements.
“We are very excited. It’s not often this type of project lines up with a ready market where demand is tremendous. Both companies are committed to being good members of the community and one of the ways we are doing this is by keeping the lines of communication open with the pubic and letting people know we are willing to work with them,” Mattleson said.
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