A planned $327 million expansion will boost refining capacity by 18 percent at the National Cooperative Refinery Association facility at McPherson, Kan., CHS Inc., an energy, grains and foods business and the nation's leading farmer-owned cooperative, announced today.
The multi-faceted project, which will begin this spring, will boost refining capacity to 100,000 barrels per day from the facility's current 85,000 barrels per day. Completion will take place in phases during the second half of calendar 2015 and the first months of 2016, with production coming on line in early 2016. CHS is in the process of acquiring 100 percent ownership of the McPherson-based operation from current minority partners Growmark, Inc., of Bloomington, Ill., and MFA Oil of Columbia, Mo.
The expansion project will take place concurrent with construction of a $555 million replacement coker already in progress. The McPherson refinery will continue to operate normally during both construction projects.
"Investing in additional refining capacity at McPherson is further evidence of our commitment to expanding our energy platform to add value for our owners and customers while becoming the premier marketer of refined fuels to rural America," said Jay Debertin, CHS executive vice president and chief executive officer, Energy and Foods.
The expansion brings to more than $1.4 billion the investments CHS has made or committed to over the past 24 months to expand and upgrade its refining, pipeline and distribution system in order to further strengthen dependable supplies of quality refined fuels to its owners and customers, Debertin said.
Debertin said the additional refined fuels gallons produced will allow CHS to better match production from McPherson and its 55,000 barrels per day refinery at Laurel, Mont., with customer demand. "The added refinery production will be equally divided between diesel and gasoline to best meet our customers' agricultural needs in rural America," he said.