DICKINSON, N.D. — North Dakota’s newest oil refinery lost money in its first few months of operation.
The Dakota Prairie Refinery near Dickinson lost nearly $3.9 million in the second quarter, the Bismarck Tribune reported. MDU Resources Group cited “extremely difficult market conditions” for diesel fuel.
Factors included higher prices for western North Dakota crude and an increase in demand for Bakken oil due to a drop in Canadian oil production because of wildfires. At the same time, demand for diesel nationally dropped because of ample stockpiles of the fuel.
“It really is commodity driven,” MDU Resources CEO Dave Goodin said.
Bismarck-based MDU Resources Group and Indianapolis-based Calumet Specialty Products Partners built the $430 million plant that can process 20,000 barrels of western North Dakota oil each day into diesel fuel and other products. A barrel is 42 gallons.
Crews broke ground on the refinery in March 2013, and it began selling fuel in May. About 90 people work full time at the plant.
MDU said it expects market conditions to improve slowly into 2016 as the diesel inventory decreases. Demand from fall harvest machinery could help.
“Refinery-related market conditions are expected to fluctuate as we have seen recently,” Goodin said.
Information from: Bismarck Tribune, http://www.bismarcktribune.com
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