MDU Resources has signed a non-binding letter of intent with Calumet to explore the feasibility of jointly building and operating a 20,000 bpd diesel refinery in southwestern North Dakota.
The facility would process Bakken crude and market the diesel within the Bakken region, the companies said.
Site selection, permitting, crude oil feed procurement, marketing and engineering studies are currently underway, the firms said.
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, CEO of MDU Resources.
We believe this joint venture will add value to Bakken crude, he continued.
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.
We are excited that the owners of our general partner are partnering with MDU Resources and WBI to explore refining opportunities in the Bakken, said Jennifer G. Straumins, chief operating officer of Calumets general partner.
We believe that our refining capabilities and their operating experience in the Bakken would be a strong combination, she added. 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 facilitys natural gas and electric generation needs to be provided by Montana-Dakota Utilities. The companys construction companies are also capable of providing materials and services required to build the facility.