• 3 minutes Boris Johnson taken decision about 5G Huawei ban by delay (fait accompli method)
  • 6 minutes This Battery Uses Up CO2 to Create Energy
  • 10 minutes Phase One trade deal, for China it is all about technology war
  • 12 minutes Trump has changed into a World Leader
  • 9 hours Shale Oil Fiasco
  • 2 hours Might be Time for NG Producers to Find New Career
  • 1 hour Angela Merkel take notice. Russia cut off Belarus oil supply because they would not do as Russia demanded
  • 10 hours Environmentalists demand oil and gas companies *IN THE USA AND CANADA* reduce emissions to address climate change
  • 6 hours We're freezing! Isn't it great? The carbon tax must be working!
  • 1 day Prototype Haliade X 12MW turbine starts operating in Rotterdam
  • 1 day Wind Turbine Blades Not Recyclable
  • 1 day China's Economy and Subsequent Energy Demand To Decelerate Sharply Through 2024
  • 1 day Swedes Think Climate Policy Worst Waste of Taxpayers' Money in 2019
  • 1 hour Indonesia Stands Up to China. Will Japan Help?
  • 1 day Denmark gets 47% of its electricity from wind in 2019
  • 9 hours US Shale: Technology

Newest Refinery in U.S. Could Fall to Low Oil Prices

North Dakota Refinery

A brand new North Dakota refinery—the only new refinery built in the United States since the 1970s--has been forced to cut production, while its owners and operators are forced to concede that a sell-off might be in order thanks to the consistently low oil prices.

The North Dakota based refinery, owned by MDU Resources Group Inc and Calumet Specialty Product Partners LP, is only running at 75 percent of capacity due to low demand for diesel fuel, which is its main product. Refinery losses over the first quarter amount to $7.2 million.

"In light of current market conditions, we are assessing various options with respect to our ownership interest in the refinery," Dave Goodin, MDU's chief executive, told investors on Wednesday.

Related: Is This The Biggest Red Herring In Oil Markets?

The refinery, which only started selling fuel a year ago, got off to a rocky start with an initial investment of US$430 million—a sum that was 40 percent above original estimates.

The new refinery is one of only two refineries in North Dakota. The timing, however, was not ideal. Crude oil started to slide before the refinery even got off the ground.

In its turn, partner Calumet said the company has started a "comprehensive review of our existing assets," including the North Dakota refinery. "We believe every asset in our portfolio must be financially self-reliant to remain part of this long-term portfolio," Calumet CEO Tim Go said in a statement.

Related: Why Oil Prices Will Likely Drop Below $40 Soon

In its quarterly earnings report, Calumet says it may divest some of its assets, including the refinery.

Under these difficult circumstances, MDU was compelled to use oil from its own wells in order to keep operating the refinery.

The North Dakota’s refinery plight may dishearten other similar initiatives in the state, including the three affiliated American Indian tribes of the MHA Nation who had eyed building such facilities in the state previously.

By Charles Kennedy of Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage


Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play