Tesoro acquires Dakota Prairie Refining from MDU Resources

Tesoro’s affiliate Tesoro Refining & Marketing has acquired Dakota Prairie Refining (DPR) from WBI Energy, a subsidiary of MDU Resources Group.

DPR owns a refinery near Dickinson in North Dakota, US, which has a crude oil capacity of 20,000 barrels per day and access to Bakken crude oil.

The refinery has the capacity to produce about 8,000 barrels per day of diesel fuel, as well as the byproducts naphtha and atmospheric tower bottoms.

MDU Resources president and CEO David Goodin said: "Selling the refinery reduces our risk by decreasing our exposure to commodity prices, and it allows us to sharpen our focus on the growth opportunities at our ongoing businesses.

"As we have previously announced, we have a $1.5bn, five-year capital investment plan at our regulated utility businesses, and we just announced a $50m potential natural gas pipeline expansion project in North Dakota."

Following the acquisition, Tesoro plans to continue to market the sulfur diesel to local customers, as well as use the naphtha and resid in its integrated value chain system.

Furthermore, the company is ensuring the continued servicing of DPR’s $66m term loan debt and contributing approximately $10m toward working capital.

Tesoro chairman, president and CEO Greg Goff said: "This acquisition presents new opportunities for continued growth.

"We have already identified plans to drive substantial improvements, and we are prepared to execute on these plans in 2016.

"This includes system-wide commercial and feedstock optimisation, increased efficiencies in distribution and reduced transportation and refining costs."

Through its subsidiaries, Tesoro operates six refineries in the western US with a combined capacity of more than 875,000 barrels per day.