Joint venture plans grassroots refinery for North Dakota

Quantum Energy Inc., Tempe, Ariz., said it will form a joint venture with Native Son Holdings LLC (NSH), The Woodlands, Tex., to build North Dakota’s third refinery (OGJ Online, May 4, 2015).

To be owned by Quantum Energy and NSH subsidiary Native Son Refining LLC, Quantum Native Processing Partners LLC (QNPP) would be responsible for construction and operation of a proposed 40,000-b/d grassroots refinery in Berthold, ND, Quantum Energy said.

The companies’ agreement to team on the Berthold refinery project follows the recent addition of Robert L. Monday, founder of NSH and its subsidiaries, to Quantum Energy’s advisory board, as well as expedites and consolidates preexisting plans by Quantum Energy and NSR to build separate refineries in the region.

NSR’s design for a 40,000-b/d refinery, for which a team of NSR engineers previously prepared a construction permit application, also would double the capacity of Quantum Energy’s original plan for a 20,000-b/d plant (OGJ Online, Mar. 21, 2014), according to Stan Wilson, chairman of Quantum Energy.

The companies intend to file the construction permit application for the JV’s Berthold refinery by the end of July, said Andrew Kacic, Quantum Energy’s chief executive officer.

Quantum Energy and NSR also are in discussions with a Canadian firm regarding the possible formation of another JV to construct another 40,000-b/d refinery in either Manitoba or Saskatchewan, the company said.

The companies did not disclose either a timeframe or estimated cost for the proposed Berthold refinery.

Bigger plans

Quantum Energy’s proposed $250 million, 20,000-b/d hydroskimming refinery in East Fairview, ND, stalled in July 2014, following termination of an agreement with Northstar Transloading LLC to purchase 80 acres of land adjacent to a Northstar terminal for the plant’s construction, according to Quantum Energy’s most recent annual report.

Late during third-quarter 2014, however, the company entered into an agreement with Bilfinger Westcon Inc., Bismarck, ND, to jointly develop up to five clean-energy centers throughout the Bakken formation, each of which would include a 20,000-b/d diesel-topping refinery, an NGL stripping plant, and equipment for carbon dioxide recovery, Quantum Energy said.

Refineries would produce ultralow-sulfur diesel for local distribution, with any secondary products available for shipping via rail to other refineries or end users.

The newly announced QNPP refinery likely will be situated on part of a combined 340-acre site in the Berthold area of Ward County, ND, that Quantum Energy secured in a series of separate transactions during fourth-quarter 2014 for construction of its Berthold energy center.

Quantum Energy also has signed 2-year option agreements with landowners to build proposed energy centers in Baker, Mont.; Fairview, Mont.; and Stanley, ND, according to the company’s web site.

Contact Robert Brelsford at rbrelsford@ogjonline.com.

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