Calumet, WBI Energy form venture to build North Dakota diesel refinery

MDU Resources Group and Calumet Specialty Products have formed a new joint venture to develop, build and operate a diesel refinery in southwestern North Dakota, the companies announced on Friday.

The joint venture will be called Dakota Prairie Refining.

“This joint venture allows us to continue our plan of diversifying into geographies with favorable feedstock options and niche product markets,” said Jennifer G. Straumins, president and chief operating officer of Calumet’s general partner.

MDU Resources Group’s participation in the joint venture will be through its wholly-owned subsidiary, WBI Energy.

The facility will process 20,000 bpd of Bakken crude oil. Construction could begin this spring, and is expected to take up to 20 months.

The plant will be located on a 318-acre site located west of Dickinson in Stark County, N.D. It will employ approximately 100 people. Hiring and training of operating personnel is expected to begin in 2013.

The plant will employ its own plant manager and management team, who will report to a governing board composed of representatives of WBI Energy and Calumet.

“Through this joint venture we are continuing to expand both our midstream energy business and our vertically integrated investment in the Bakken oil play,” said David L. Goodin, CEO of MDU Resources.

“There is a strong existing market for the plant’s production," he added.

The facility’s engineering and plant design are in the final stages, according to the companies.

Westcon has been selected as the general contractor, and Ventech Engineering will be the primary equipment and technology provider.

MDU Resources’ construction businesses, Knife River Corp. and MDU Construction Services Group, are among potential subcontractors.

Other MDU Resources’ companies involved in the project include Fidelity Exploration and Production Co., which will supply some of the facility’s crude oil; WBI Energy, which will supply natural gas service to operate the facility; and Montana-Dakota Utilities, which will supply the facility’s electricity needs.

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