ND's Only Oil Refinery Heads for Record

Tesoro Corp.'s Mandan refinery has been processing about 58,000 barrels of Williston Basin crude oil per day for most of the year, spokesman Leif Peterson said. A barrel is 42 gallons.

"We're running flat out to meet our customers' needs," Peterson said.

The Mandan refinery, built in 1954, produces gasoline, diesel, jet fuel, propane, butane and residual fuel. Tesoro, which is based in San Antonio, acquired the refinery from BP in 2001.

The exact amount of production at the refinery won't be released for proprietary reasons, but it is heading for a record, Peterson said.

An ethanol blending facility is slated to be in place by the end of the year, a first for the refinery, said Brent Hilken, the company's economics and scheduling supervisor.

Peterson said ethanol will be purchased from suppliers and blended with gasoline produced at the refinery. It then will be trucked to customers.

"We recognize there is a customer base out there that wants ethanol," Hilken said. "We are trying to be a competitive ethanol supplier."

The ethanol blending facility also "will give us a better handle on quality control," he said.

Tesoro has invested more than $100 million in environmental and production upgrades over the past four years, Peterson said.

Most of the refinery's products are sold to customers in the Dakotas, Minnesota and Wisconsin, Peterson said. Gasoline makes up about 60 percent of the refinery's production on average, he said.

At present, about 80 percent of the diesel and 35 percent of the gasoline produced at the refinery stays in state, he said. Overall, about half of the refinery's production remains in North Dakota, he said. Tesoro considers Moorhead, Minn., which neighbors Fargo, a North Dakota market, he said.

The refinery began producing No.1 diesel, used for home heating fuel, this month.

Energy officials say North Dakota could be among states that could suffer home heating fuel shortages this winter, if colder-than-normal temperatures hit. But Hilken said the temperatures are off to a mild start, and that will help home heating fuel supplies.

"We're three-quarters through November and it hasn't been cold yet," he said.

Refineries attempt to calculate the amount of home heating fuel needed each year so they don't get stuck with oversupply, which is costly to store or blend with other fuel, he said.

"Ideally, we like to meet enough for customers' demands and no more," Hilken said.