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New Dickinson, N.D., Diesel Refinery First in U.S. Since 1976

Construction of a 20,000 barrel per-day diesel refinery near Dickinson in western North Dakota began in late March 2013.

Thu August 14, 2014 - Midwest Edition
Dorinda Anderson

Construction of a 20,000 barrel per-day diesel refinery near Dickinson in western North Dakota began in late March 2013. This is the first refinery to be constructed anywhere in the United States since 1976, and the first in North Dakota since the refinery in Mandan was built in 1956. This green field refinery, meaning from the dirt up, is located 4 mi. (6.4 km) west of Dickinson on 318 acres.

The $300 million Dakota Prairie Refinery (DPR) is a 50-50 partnership between energy company MDU Resources Group Inc., based in Bismarck, N.D., and Calumet Specialty Products, an Indianapolis-based refining company. MDU Resources Group Inc. is heading up the infrastructure expertise and local ties, while Calumet Specialty Products Partners brings refinery experience.

Principal Technology is working with Ventech Engineers North America LLC of Houston, the primary equipment and technology provider on the project, to supply the Sulfur Recovery Units, according to information from Principal Technologies Inc.

Once completed, the plant will turn crude oil that is being pumped from the Bakken oil field in western North Dakota into diesel for local truck and equipment markets and for other hydrocarbon byproducts.

Throughout the course of the project about 400 people will be employed. Once the plant is up and running it is anticipated that 90 will be employed. The DPR facility is expected to be functional 24 hours a day with employees working two 12-hour shifts. It’s also projected to emit close to 125,000 tons (113,398 t) of carbon dioxide per year into the atmosphere, though officials have indicated that potential odors from the topping plant are not expected to be an issue for Dickinson or neighboring South Heart residents, said Tim Rasmussen, MDU spokesperson.

Due to the oil boom in western North Dakota on the Bakken Formation, the demand for diesel has increased tremendously in the area at 53,000 barrels a day and is expected to reach 75,000 barrels a day by 2025, according to information from Principal Technologies Inc. To meet the current demand, more than half of North Dakota’s diesel is being brought in from refineries in nearby states like Montana and Minnesota.

The majority of the diesel is used to power the trucks and trains needed to move crude oil and materials. Railroad use has increased due to the oil boom and is a critical mode of transportation since the existing pipeline networks are overwhelmed by the increase of oil from the Bakken Formation. Rail is used to move out more than 100,000 barrel each day of crude from the Bakken.

It also takes about 3,000 gal. (11,356 L) of diesel each day to power one drill rig. As of June 2014, there were 193 active rigs in the state.

In addition to the 20,000 barrels of oil to be produced, 7,000 barrels of diesel fuel will be produced each day to meet the needs of North Dakota. The remaining petroleum will be shipped to other refineries for further processing, according to information from Principal Technologies Inc.

The Dakota Prairie Refinery is just one of several proposed refineries in North Dakota and the first to begin construction. The state’s only current refinery is located 223 miles southeast of Dickinson in Mandan, N.D., and recently expanded diesel production to 71,000 bpd. It is owned by Tesoro Corp. North Dakota, however, still won’t be close to supplying enough diesel to meet its own needs. The Dakota Oil Processing project is expected to fill 252,000 gal. (953,923.8 L) per day, or about 10 percent of the state’s current diesel needs, according to information from Tesoro.

Work began in November 2013 on a $400 million MHA Nation Clean Fuels Refinery by the Three Affiliated Tribes near Makoti, N.D., on the Fort Berthold Reservation. This plant is to be capable of turning 20,000 barrels a day of Bakken crude into diesel fuel propane and naphtha.

A fourth proposed project in East Fairview, N.D., by Quantum Energy Inc. would construct a 20,000 barrel-per-day refinery west of Watford City near the Montana border.

Also, Dakota Oil Processing is proposing a 20,000 barrel-per-day refinery in Trenton, N.D., which has been in the planning stages since 2007.

Construction of the DPR plant near Dickinson is on track even though the beginning of the construction process was delayed some by a wetter than usual spring, Rasmussen said. Currently, crews near Dickinson are constructing storage tanks and they are working on the maintenance building, which was 70 percent complete as of late March.

The administrative building, which houses 20 employees, is complete, while the maintenance/warehouse building was 70 percent complete as of late March.

“It is the largest enclosed structure on the grounds, said plant manager Dave Podratz. Wisconsin native Podratz was recently hired as the future plant manager at the Dakota Prairie Refinery. Podratz will lead the organizational development, start-up and commissioning process of the refinery.

As of early March, 52 of the 89 positions available at the new plant had been filled, or offers were in the works, Rasmussen said.

“Those who have been hired, mostly management and supervisory, are creating the processes for the plant once it is operational.”

The control room was 30 percent complete and is located next to the tank farm on the plant grounds, and the pipe rack, made of structural steel, was 53 percent completed. The pipe is used to connect the various processing facilities.

The project is more than half complete and is on track for commissioning to begin this fall, with the anticipated startup in December, according to Rasmussen. A wet spring in 2013 when the project began caused some delays but in the fall of 2013 crews were able to accomplish below-ground work that allowed crews to work through the winter on above-ground work, even though it was a colder than average winter.

“Some large enclosures were built to pour the concrete in order to be able to work through the winter,” Podratz added.

The new diesel processing plant requires the construction of 18 storage tanks, which are to be complete by mid-July.

The tanks are slated for various uses and range in size from 1,000 to 40,000 barrel capacity and three are for crude oil storage at a capacity of 75,000 barrels each. The three crude oil tanks are complete. The other tanks will hold the final produce of diesel, kerosene and naphtha, while the 1,000 barrel tank is for demineralized water.

General Contractor Westcon Inc. of Bismarck, N.D., which specializes in refinery-related construction throughout the United States, used a couple of large cranes and a crawler crane to put the crude towers in place, according to Podratz. Crews used a number of screw piles, rather than first digging a hole to construct piles, and screwed the piles in for some of the lighter loads.

Ventech Engineers, the primary equipment and technology provider, is constructing the refinery modules in a shop in Texas. Westcon installs them once they are delivered to the site.

“The level of logistical control of this project is like a fine Russian ballet going on on the prairie,” Rasmussen said. “The scheduling and the logistical control of this is a testament of some strong construction management that is taking place. We sit here and say the project is 49 percent complete while we are coming off of one of the most brutal winters in recent history. That is a testament of some pretty controlled management.”

In order to access the area on the 318-acre property where the tank farm is located, crews first needed to build a bridge.

“The Heart River runs toward the front of the site and there was no other way to get to the site so crews had to build a bridge, which was started early during the course of the project and completed in September, 2013,” Podratz said. “It is a concrete bridge, sturdy enough to supports the heavy equipment and the 100-ton crude oil distillation tower.”

The crude oil distillation tower was delivered in January, beginning its trek in Taiwan on a custom-made trailer with 92 tires, at a maximum speed of 35 mph, Rasmussen said.

“We considered this a milestone because that is a central piece of refinery equipment and getting that delivered and constructed is a key milestone for us.”

Delivery of the crude oil distillation tower began on Nov. 6, 2013, in Taiwan and ended Jan. 21 at the entrance of the Dakota Prairie Refining facility. The tower is the part of the first step in the refining process and is used to separate the crude oil into naphtha, distillate and other petroleum components, according to information from MDU. These components will be further treated in the downstream refinery processes to produce various products, including diesel fuel for the local market in North Dakota.

The tower is 140-ft. (42.6 m) long, more than 14 ft. (4.2 m) in diameter and weighs more than 100 tons (90 t). The truck rig transporting the tower was 225 ft. (68 m) long and required two truck tractors to pull it.

The tower was loaded on a ship in Taiwan and shipped across the Pacific Ocean through November and early December and passed through the Panama Canal on Dec. 13. It arrived Dec. 20 at the Port of Houston, where it was loaded on a custom-designed trailer for the 1,700 mi. (2,736 km) trip to Dickinson, N.D., according to MDU information.

In February, the tower was lifted into place with two large cranes specifically engineered for the task.

“It took a little more than an hour from the start of the lift to the finish to place the tower on its concrete pad and secure it with seven-foot bolts embedded in the concrete,” said Rasmussen.

The administration building, which is on the north of the 318-acre site, is a secure location.

“The delivery trucks don’t go through the security gate but they do need to go over the bridge to get to the tank area,” Podratz said.

During the first year of construction, from March 2013 to March 2014, 400,000 man-hours had been worked, Rasmussen said. Depending on what task was being performed, crews worked some overnights, partially to stay on task and partially for safety concerns.

“Worker safety is a very high priority on this project and we have some very good safety stats as our recognition of this. We have had two OSHA reported injuries and have had no loss time injuries,” Rasmussen said. “That is phenomenal.”

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