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Refinery co-owned by Calumet to start producing next month

November 7, 2014

Construction is wrapping up on an oil refinery near Dickinson, North Dakota, that is expected to start producing fuel next month.

Indianapolis-based Calumet Specialty Products Partners and Bismarck-based MDU Resources Group Inc. are building the $350 million Dakota Prairie Refinery on a 300-acre farmland site west of Dickinson. Construction started in March 2013.

It will be the first new refinery to open in the United States since 2008 and the first greenfield refinery built in the U.S. since 1976.

The refinery will help meet the need for diesel fuel in the booming western oil patch. About 90 people will work there full time, turning 20,000 barrels of crude from the rich Bakken and Three Forks formations in western North Dakota into 7,000 barrels of fuel each day. A barrel is 42 gallons.

"We've been at this for a year and a half or so. Hiring the employees, getting them trained, following the construction process," plant manager Dave Podratz told KXMB-TV in Bismarck. "Now we're actively getting the plant commissioned, ready to start up, and we're really excited to be able to put our hands on the plant and start up the first new refinery in 40 years."

The only refinery operating in North Dakota is the Tesoro Corp. facility at Mandan.

"This refinery is designed to the most modern emission standards, very strict permit limits," Podratz said. "And it's going to be one of the most efficient refineries in the country."

According to the original agreement, Calumet contributed $75 million to the project and will receive half the profit from the operation. MDU, which will run its share of the plant through subsidiary WBI Energy Inc., put $150 million into the refinery.

Another $75 million comes from a loan to the joint venture, which will operate as the Dakota Prairie Refining LLC.

MDU will provide some of the crude, as well as the natural gas and electricity utilities. Calumet will run the operations, procure additional crude oil and market the products.

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