The Dakota Prairie Refinery located in Dickinson, North Dakota, has commenced operations. The facility has started producing diesel fuel and anticipates sales of the refined product to begin in May as the plant ramps up operations.
Jointly owned and operated by MDU Resources Group Inc. (NYSE: MDU) and Calumet Specialty Products Partners LP (NASDAQ: CLMT), the refining facility is the first ‘greenfield fuels refinery’ built in the U.S. in almost 40 years. A greenfield project is defined as a new site being constructed on a location not previously used for an industrial purpose.
The refinery, using locally sourced Bakken crude, is capable of processing 20,000 barrels per day (bpd), resulting in the production of approximately 7,000 bpd of diesel fuel that will be sold to regional and North Dakota-based customers. Construction of the facility began on a 318-acre site on March 26, 2013, about four miles west of Dickinson. The total cost of the plant is estimated to be up to $435 million and currently employs roughly 80 people.
In a statement, President and CEO of MDU Resources David L. Goodin said, “With more than two-thirds of North Dakota’s diesel fuel currently imported into the state, the Dakota Prairie refinery is well positioned to meet strong regional demand with additional, locally produced supplies of diesel fuels. Over time, we expect that this refinery has the potential to be an important contributor to the economic growth of the local and state economy.”
The facility will also produce up to 6,500 bpd of naphtha, an intermediate hydrocarbon liquid stream derived from the refining of crude oil, which will be used to dilute heavy oil transported by pipeline or as a feedstock for gasoline production. Additionally, the facility is able to collect roughly 6,500 bpd of crude distillate, also known as atmospheric tower bottoms, which can be used as feedstock for lubricating oils and other refined products.
Goodin said, “We are thankful for the support of local and state officials and agencies, and for the economic development climate that they have created in North Dakota. Together with our committed partner, Calumet, we are proud to have built the first refinery in this country since 1976.”