Billings being considered for $500M Bakken crude refinery

2014-08-14T14:40:00Z 2014-08-22T10:38:05Z Billings being considered for $500M Bakken crude refineryBy TOM HOWARD thoward@billingsgazette.com The Billings Gazette

The Billings area is being considered as a site of a proposed $500 million "clean energy center" that would refine Bakken crude into diesel fuel.

Adjacent facilities would separate propane, butane and other lighter components from the crude stream and capture carbon dioxide for use in enhanced oil recovery.

Andrew Kacic, of Williston, N.D., chief executive of Quantum Energy Inc., said the company has plans to develop five 21st Century Clean Energy Centers throughout the Bakken area. If built, the refinery would result in 150 well-paying, permanent jobs in the Billings area, he said.

"We're going where we would be welcome. If we have county, city and state support, we will go for it," Kacic said Thursday. “We want to bring in 150 families who want to live in the area.”

In June, Quantum officials announced they had signed a letter of intent to purchase 400 acres near Baker to develop a 20,000-barrel-per-day refinery. The company also is discussing a possible purchase of property in Fairview and Minot, N.D.

Officials from Quantum plan to hold a presentation before Yellowstone County commissioners Tuesday morning. The commission meeting begins at 9:30 a.m.

Kacic said the company is interested in Yellowstone County because it already has three oil refineries in operation and because Bakken crude is already being transported through the Billings area via rail. The proposed refinery would not only help meet demand for diesel fuel, it would also help reduce the price of diesel fuel in the area, Kacic said.

By way of comparison, ExxonMobil’s Billings refinery processes about 60,000 barrels of crude each day.

Kacic said the proposed Billings facility would be similar to the Dakota Prairie Refinery, now under construction near Dickinson, N.D. According to MDU Resources, that plant is the first new refinery built in the United States since 1976. MDU is building the refinery under a joint venture with Calumet Specialty Products Partners LP.

Quantum Energy’s plans for developing downstream oil processing plants represents a significant new level of investment resulting from the booming Bakken, which has seen its oil production eclipse 1 million barrels per day.

While Yellowstone County has no producing oil wells, the Billings area has been a magnet for energy-related companies. Energy-related manufacturing companies, trucking companies, engineering firms and geology companies have all sprung up in Billings in the wake of the Bakken boom.

“This clean technology has really got me excited,” said Commissioner John Ostlund. “They’re going to have a great presentation and I think it will be well received. The three refineries have been some of the best partners we’ve had in Yellowstone County, and we’re proud to be the energy hub in the state.”

Steve Arveschoug, executive director of Big Sky Economic Development, said the project, would represent a significant economic boost for Yellowstone County.

“We’re still trying to understand the details and the time frame for this project,” Arveschoug said. “This is an opportunity to develop a new technological concept that can spin off a lot of ancillary jobs, not just in construction but for ongoing service providers.”

Jeremy Vannatta, BSED’s director of business outreach, recruitment and marketing, said the proposed refinery fits in with efforts to position Billings as a strategic energy hub. He said officials from Quantum Energy have been in the Billings area for several months, discussing potential sites with private property owners.

“The company is very excited about Billings from everything we hear. They think Billings is a great market for a project as they evaluate sites in Montana and North Dakota,” Vannatta said.

Copyright 2014 The Billings Gazette. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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