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Sole N.D. Refinery Plans Monthlong Maintenance Shutdown

Fri, 03/12/2010 - 10:09am

James MacPherson, Associated Press Writer

BISMARCK, N.D. (AP) — North Dakota's only oil refinery is planning a monthlong shutdown for maintenance and upgrades beginning next month though officials say customers should not see any fuel shortages or price increases.

The planned $125 million project at Tesoro Petroleum Corp.'s Mandan refinery will increase its capacity for ultra-low sulfur diesel fuel — or off-road diesel — by about 2,000 barrels daily, said Ron Day, the company's environmental health and safety manager. The overhaul also will allow the refinery to meet forthcoming federal environmental standards, he said.

It is the most extensive overhaul at the facility since 2003, when it was closed for about a month, Day said. Two earlier overhauls, in 1990 and 1995, each lasted 36 days.

The refinery normally runs nonstop to process about 58,000 barrels of Williston Basin crude oil per day. It will suspend operations in mid-April and restart about 30 days later, Day said.

The Mandan facility has 240 employees, and none will be laid off during the shutdown, Day said. Those workers, along with about 1,500 contractors, will be performing the overhaul work.

The refinery will ship but not produce fuel during the shutdown; the company has been building up fuel stocks in anticipation of the closure, Day said.

Built in 1954, the refinery produces gasoline, diesel, jet fuel, propane, butane and residual fuel. It also has an ethanol blending facility. Tesoro, which is based in San Antonio, acquired the refinery from BP in 2001.

The company owns seven refineries in the U.S. and none are expected to be offline while work at the Mandan refinery is being done, Day said.

Most of the Mandan refinery's products are shipped through pipelines to eastern North Dakota and Minnesota and sold to customers in the Dakotas, Minnesota and Wisconsin, Day said. Gasoline makes up about 60 percent of the refinery's production on average.

At present, about 80 percent of the diesel and 35 percent of the gasoline produced at the refinery stays in state, he said.

Mike Rud, president of the North Dakota Petroleum Marketers Association, said the refinery's planned increase of low-sulfer diesel would help curb potential shortages.

"Diesel is still king in North Dakota, with the agriculture and energy sectors," Rud said. "If you can put that much more in the system, it's a win-win for everyone involved."

Day said the planned project will bring to $250 million the amount of money that Tesoro has spent on environmental and production upgrades at the refinery since its acquisition.

"They've been very committed to this site and improving it so we can meet all environmental regulations," Day said.

Part of the work planned during the shutdown will be to maintain and upgrade a scrubber that reduces sulfur dioxide and other pollution, Day said. The scrubber consists of a series of nozzles that spray water on gas before it escapes the refinery's main stack, he said.

The oil refinery had a one-day shutdown last summer after losing power and steam during a project to upgrade the plant's boilers. The problem caused a large black cloud that drifted over the Bismarck-Mandan area but state health officials said there was no threat to the public.

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