Ground broken for diesel refinery in North Dakota

2013-03-26T11:40:00Z Ground broken for diesel refinery in North DakotaBy LAUREN DONOVAN | Bismarck Tribune Bismarck Tribune

DICKINSON — A green field project and a cold brown field made history in Dickinson on Tuesday.

A green field refinery — a term that means from the dirt on up — officially started construction in bare frozen soil about four miles west of town, the first time since 1976 that a new refinery has gone under construction anywhere in the country.

Calumet Specialty Products and MDU Resources are 50-50 partners in the $300 million venture that will turn Bakken crude into diesel for local truck and equipment markets, and other hydrocarbon byproducts. The companies invited dignitaries, employees and local residents to a golden-shovel photo op in a cold March wind out at the site and then to warm up with coffee and speeches at the local activities center.

Suits and smiles abounded and Dickinson’s economic development director Gaylon Baker wore both. He told the crowd he was probably the single luckiest developer in the USA that day.

“Who else can claim they’ve got the only new refinery in the country?” he said.

Besides 400 construction jobs, the refinery will employ 100 full time workers and each of the latter will spin off another four indirect jobs. It’s expected to go on line in December 2014.

“This will make a more well-balanced community,” Baker said, talking about a town that’s already reeling from Bakken oil-induced impact.

Dickinson Mayor Dennis Johnson said the refinery site has the potential for tremendous development. A fairly new oil loadout for unit trains is already next door, along with natural gas pipeline, transmission lines and a new exit off Interstate 94 that will go right to the refinery’s 318-acre front door.

Johnson said Dickinson and the small town of South Heart, five miles the other direction, will need to cooperate on a comprehensive land use plan for the area. The land is in the South Heart School District.

Jennifer Straumins, chief operating officer for Calumet Specialty Products, of Indiana, said her dad started the company two decades ago and it was his idea to build a Bakken crude refinery in North Dakota.

She said he went looking for a partner and came back with MDU Resources, which is already a player in electricity and oil development in the region.

Straumins said her company is publicly traded so she can’t talk specifics, but she expects the refinery to do very well at repaying its $75 million term loan from the Bank of North Dakota, and beyond.

“I would say the only risk is finding enough talented employees with North Dakota’s low unemployment rate. We’re recruiting right now,” she said. Training will run concurrently with construction.

Each company is in for half of the investment, she said.

Her company isn’t the only one looking for employees.

So is WestCon, the general contractor for the project.

Company president Mark Peterson said his company’s been hiring for a month and will continue to hire through next spring. He said an important hiring issue is finding housing and man camp-style accommodations for workers.

“It’s as big a project as we’ve ever done,” he said. A refinery isn’t off the company’s resume; it has built Garden II and III gas processing plants for OneOk in the Watford City area.

Ron Ness, executive director of the North Dakota Petroleum Council, said the 20,000-barrel daily plant will make a difference in the Bakken crude market.

“We see and hear about the challenges of the Bakken every day, but this demonstrates the true value of what we have our hands on in North Dakota,” Ness said.

Reach reporter Lauren Donovan at 701-220-5511 or lauren@westriv.com.

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View the North Dakota Industrial Commission Department of Mineral Resources Oil and Gas Division oil well daily activity reports.

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