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Regulators approve pipelines for new diesel refinery in N.D.

BISMARCK — State utility regulators gave their blessing this week for two pipelines that will carry petroleum byproducts from a new diesel refinery near Dickinson to a nearby rail hub, crossing the Heart River in the process.

Dakota Prairie Refining LLC, which is building a diesel refinery slated for startup in December 2014, will use the 6- and 8-inch-diameter pipelines to transport the byproducts about 5,900 feet from the refinery’s storage tanks to Lario Shipping LLC’s rail hub.

The North Dakota Public Service Commission approved the estimated $5 million project on Monday.

Commissioner Julie Fedorchak said the biggest issue was that the pipelines will cross the Heart River.

The approved design calls for the pipelines to be attached to a privately-owned bridge over the river. Any leaks would be diverted off the bridge into containment basins away from the river.

Fedorchak noted the refinery will be the first of its kind built in the United States since 1976. It will process 20,000 barrels of Bakken crude per day, producing 7,000 to 10,000 barrels of diesel fuel daily that will be trucked to fueling stations within 50 miles of the refinery.

“This kind of project is really in demand and needed in the west,” she said.

The refinery also will produce byproducts that will be sent through the pipelines and shipped to market by rail.

The commission also approved Bakken Oil Express LLC’s application to construct a 38-mile, 16-inch-diameter crude oil pipeline that’s expected to reduce truck traffic on State Highway 22 between Killdeer and Dickinson.

The pipeline will transport up to 165,000 barrels of oil per day — the equivalent of 825 tanker trucks — from a facility near Killdeer to an existing rail hub owned by Bakken Oil Express southwest of Dickinson, according to documents filed with the commission.

Construction is expected to take 12 to 14 weeks, with an estimated project cost of $14 million.

In what commission chairman Brian Kalk said is a first for the commission, the approved order requires Bakken Oil Express to inform the PSC of any spills that are required to be reported to other state and federal agencies, including the U.S. Pipeline and Hazardous Materials Safety Administration.

The new requirement comes after state officials were criticized for delays in reporting a 20,600-barrel oil pipeline spill near Tioga last fall.

“It’s definitely a sea change that’s happening in our orders,” Kalk said.

Mike Nowatzki

Mike Nowatzki reports for Forum News Service. He can be reached at (701) 255-5607.