a joint venture of mdu resources group and calumet...
TRANSCRIPT
Dakota Prairie Refining
John Stumpf Vice President – Strategic Planning
A joint venture of MDU Resources Group and Calumet Specialty Products Partners
Initial discussions between the partners began in Dec. 2011.
Situation: Ample supply of high quality crude oil within an underserved diesel market driven by energy and agriculture sectors.
– No refined products pipeline in western region of North Dakota.
Dakota Prairie Refining
Dakota Prairie Refining
North Dakota imports more than half of its diesel fuel Demand is now more than 53,000 bpd Expected to increase to more than 75,000 bpd by 2025 State diesel production is now approx. 22,000 bpd
Concept: Process 20,000 bpd of Bakken crude (delivered to refinery by pipeline)
Produce: – Diesel about 7,000 bpd (294,000 gallons)
About 40 to 45 tanker truckloads per day – Naphtha about 6,500 bpd – Atmospheric bottoms (ATBs) – about 6,000
bpd – Also produces some natural gas liquids
Dakota Prairie Refining
Diesel fuel: – Should serve to stabilize market in North
Dakota and new supply should reduce pricing volatility.
– Diesel to be sold to area wholesalers who will distribute it through their systems.
Dakota Prairie Refining
Dakota Prairie Refining
Naphtha: – Used primarily as feedstock for producing
high octane gasoline – Diluent for Canadian tar sands crude – Also used in chemical industry for solvents,
cleaning products, lighter fluid, fuel for camp stoves, etc.
Dakota Prairie Refining
Atmospheric bottoms – Used as feedstock for
lubricating oils and can also be processed into a premium heavy fuel oil.
Naphtha and atmospheric bottoms will be shipped by rail to other facilities for use or further processing.
It is a “topping plant.” – Strips out easily refined components,
processes them and ships remaining components off to other refineries for complete processing.
– Typically smaller than full-scale refineries. – Usually located near the primary market.
Dakota Prairie Refining
Location 350 acre plot selected for proximity to
critical infrastructure: – Rail, highway, natural gas, electricity, water
and sewer Dickinson location
– Far from Theodore Roosevelt Nat’l Park
Dakota Prairie Refining
Cost: $300 million 400 to 500 employees during peak
construction – About 100 permanent employees when
operating – Operations to run 24/7
Dakota Prairie Refining
Collaborating with Bismarck State College on training program:
– Customized plant process course with refinery stimulation. Selected students to also have on-site work
experience with Calumet refinery. – Recruiting to begin October 2013.
Dakota Prairie Refining
Groundbreaking held March 26, 2013 – ND Governor Jack Dalrymple – ND Senator John Hoeven – ND Senator Heidi Heitkamp – ND Congressman Kevin Cramer – Dickinson Mayor Dennis Johnson – MDU Resources CEO Dave Goodin
Dakota Prairie Refining
Earthwork literally started immediately following the groundbreaking.
20 months to build the facility. – Commissioning expected late 2014.
Dakota Prairie Refining
Westcon Industries – general contractor Ventech Engineering – primary equipment
and technology provider – Modular components built at Texas facility and
transported to the site
Dakota Prairie Refining
MDU Resources companies involved:
– Knife River Corporation – all groundwork
– WBI Energy – natural gas energy supplier
– WBI Energy Corrosion Services cathodic protection
– Montana-Dakota Utilities – electric service
– Potentially MDU Construction Services Group – wiring and electrical work
Dakota Prairie Refining
Permitting was a Huge Risk: Air quality permit approved by ND Dept. of Health in Feb. 2013 after review by federal EPA and completion of a public comment period. Only 3 comments were received.
– CO2 is primary greenhouse gas emission; approximately 125,000 tons/year.
– All other environmental and construction related permits are in place.
Dakota Prairie Refining
Reliable Water Supply was of Paramount Importance and required an innovative solution - Plant will use 120
to 150 gallons per minute of water to operate and must have about one
million gallons of water available at all times for fire protection (840,000
gallons of water stored at all times).
– Solution: Primary Source - treated waste water from Dickinson’s new wastewater treatment plant.
– Emergency back-up from Southwest Water Project. Southwest Water primary source of potable water
Dakota Prairie Refining
MDU Resources Group – Broad experience in energy industry including
oil and gas exploration and production, pipeline construction and operation, electric and natural gas utilities, and construction materials and services.
Dakota Prairie Refining
Calumet Specialty Products Partners – Operates specialty refineries with 11 facilities
in the U.S. and is a leading independent producer of high-quality, specialty hydrocarbon products in North America.
– Processes crude oil and other feedstocks into fuels, asphalt, customized lubricating oils, solvents and waxes used in consumer, industrial and automotive products.
Dakota Prairie Refining
A good strategy with complementary talents – Calumet brings refinery experience – MDU Resources brings infrastructure
experience and local and state contacts An excellent relationship…
– Share similar Midwestern work values and integrity
Dakota Prairie Refining
Safety: No incidents since construction began. – Rigorous safety program in place for all site work.
Rough grading and excavation is about 95 percent complete.
– Despite two-week suspension of work due to record rainfall in May and June.
Bridge work has started, beams are set and expected completion is July 15.
Tank foundations are almost complete.
Dakota Prairie Refining
Hired plant manager – Dave Podratz
Starts July 1, 2013 Over 30 years of
refinery experience and was manager of Calumet’s refinery in Superior, WI.
Dakota Prairie Refining
Key 2013 activities: – Tank construction start July 8 (expected
completion by Dec. 31). – Concrete foundations will start in July and be
complete by November 30. – Most plant utility service systems, storm
water, firewater and related systems will start mid-summer and be substantially complete by end of 2013.
– Hydrogen plant and crude distillation tower arrive in September.
– Building construction begins June 25 with completion by Dec. 31.
Dakota Prairie Refining
Stark County, Dickinson and South Heart have been great supporters of the project.
North Dakota state government has extended support and has been a long-time supporter of economic development and business growth from responsible and ethical projects.
Dakota Prairie Refining
This will be the first plant of its kind to be built in the U.S. since 1976.
Reducing our nation’s dependence on energy from less-than-friendly countries is a key benefit of projects like this.
Dakota Prairie Refining