A St. Paul firm with an office in Beulah is the choice to conduct a study on the feasibility of a new oil refinery in North Dakota.
The Corval Group is partnering with Purvin & Gertz Inc. and Mustang
Engineering, both of Houston, Texas, to study if a business case can be
made for additional refining capacity in the state. North Dakota has
just the Tesoro refinery in Mandan.
Talk about the need for additional refining capacity is the result of growing oil drilling efforts in the Bakken formation in western North Dakota and the prospects of additional oil to be tapped in the lower Three Forks formation.
"We are very proud and very excited to be selected for this study. Right now we view this as a huge step forward for the petroleum industry in the state of North Dakota," said Kurt Swenson, vice president of the Northwest Region at Corval's Beulah office.
Sen. Byron Dorgan secured $415,000 for the study from the United States Department of Energy through the National Energy Technology Laboratory. A steering committee of oil industry leaders in the state is leading the study and the North Dakota Association of Rural Electric Cooperatives is administering the study. Swenson said the study has a number of potential outcomes.
"We don't know what the study will tell us," he said. "But to have this level of interest funded through the Department of Energy and administered by the NDREC group is just tremendous."
The Corval group is one of four finalists the steering committee selected for interviews.
"We had a very productive day of discussion with these four finalists," said NDREC general manager Dennis Hill. "The Corval Group I think just presented the best case that they really understood the North Dakota oil industry."
Hill said the Corval representatives especially understood the steering committee's desire to see if a business case can be made to increase refining capacity in the state.
"They really seemed to get that and they will work their hearts out to figure that out," Hill said.
Hill added the news for the refining industry in the U.S. is not all that rosy these days, so everybody is going to be especially interested in the study's findings.
Swenson said during the first phase of the study, there are several things to be done. This includes a refined products market review that looks at what products are available in the state, where the products are coming from, along with existing refineries and terminals.
An infrastructure analysis also is to be done to examine how crude gets to and from a refinery through pipelines and rail service. In examining propane gases and oil byproducts, the study is to look at where those products go if they were to be produced at a refinery in the state.
An analysis of what crude oil is available and where it comes from, along with a competitive analysis, also is to be done. The competitive analysis is to examine what happens if the products from a new refinery were to be used in state and replace products that are currently being brought here, or if the refined products would be shipped out.
In describing the partnership Corval has formed to conduct the study, Swenson said, "We put together a team of companies that we either have personal history of working with or corporate history of working together."
Purvin & Gertz Inc. is the primary partner, especially during the first phase of the study, Swenson said.
"They have a wealth of experience on market supply, logistics and transportation and have done a significant amount of study in the Upper Midwest, including North Dakota," he said. "They provide a lot of history and a lot of analysis on this type of project."
Mustang Engineering has a long history of petrochemical facility engineering, he said, which would be the focus of the second phase of the study if a business case can be made for additional refining capacity in the state.
"They have the capability of how to configure the refinery, how to engineer it, how to cost it," Swenson said.
The second phase of the study also is to look at location of a possible refinery.
"We have been asked to be very broad based in our approach to look at various parts of the state," Swenson said of studying location. "Anything from the Williston area over to the other opposite side of the state."
About six people are to work on the study at any one time, he said, with the work to be led from his Beulah office.
"We're looking forward to doing a good study for the federal government and for the NDREC," he said. "We intend to present a good analysis and a realistic answer for the study."
Source: Williston Herald - Online Edition