MDU Resources, affiliates to study diesel refinery in JV
| February 22, 2012 |
MDU Resources Group Inc. through its wholly owned subsidiary, WBI Holdings Inc. (WBI) and Calumet Refining LLC, an entity owned by the existing owners of the general partner of Calumet Specialty Products Partners, L.P.on Feb. 21 publicly announced the signing of a nonbinding letter of intent to explore the feasibility of jointly building and operating a 20,000 barrel per day diesel refinery in southwestern North Dakota. The facility would process Bakken crude and market the diesel within the Bakken region.
Site selection, permitting, crude oil feed procurement, marketing and engineering studies are currently underway. Upon successful completion of the project, Calumet Refining, LLC expects to contribute its interest in the joint venture to Calumet in exchange for cash and/or partnership interests.
“This project will capitalize on the capabilities and expertise of two strong companies to develop a facility that will serve demand for diesel by agriculture and industry in the rapidly developing Bakken play,” said Terry D. Hildestad, president and chief executive officer of MDU Resources. “We believe this joint venture will add value to Bakken crude. It will provide value to southwestern North Dakota communities by providing steady, good-paying, long-term jobs and through the two companies’ longstanding commitment to the communities in which they operate and serve.”
Jennifer G. Straumins, president and COO of Calumet’s general partner, added: “We are excited that the owners of our general partner are partnering with MDU Resources and WBI to explore refining opportunities in the Bakken, We believe that our refining capabilities and their operating experience in the Bakken would be a strong combination. Both companies provide operational expertise and capability vital to the success of a large industrial project similar to this planned facility.”
Hildestad said the project exemplifies the potential that exists for all of the major subsidiary companies within MDU Resources to participate in a value-added project in the Bakken region and elsewhere.
“Bakken crude is expected to be sourced, in part, by our oil and natural gas production company, Fidelity,” he said. “There may be opportunities for the facility’s natural gas and electric generation needs to be provided by Montana-Dakota Utilities. The company’s construction companies are also capable of providing materials and services required to build the facility.”
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