CHS plans revamp of Montana refinery

US farmer-owned cooperative CHS Inc. plans to invest $406 million to boost efficiency and increase diesel production at its 55,000-b/d Laurel, Mont., refinery.

The investment will consist of a series of related projects that the company expects to be completed in phases through 2019, CHS said.

The upgrade project will include the construction of a hydrogen plant as well as modifications to an existing crude unit, both of which are aimed at increasing crude throughputs and diesel production at the facility.

The upgrade also will involve modifications to an existing hydrocracker that, in addition to aiding increased diesel output, will equip the refinery to process a more flexible slate of crudes and reduce production interruptions at the site.

The company expects the additional diesel production from Laurel will help its growing network of Cenex-branded marketers to capture continued growth opportunities resulting from robust diesel demand, particularly in the northern-tier states, said Jay Debertin, executive vice-president and chief operating officer of CHS’ energy and foods division.

Including the newly proposed upgrade, CHS has invested nearly $2 billion in projects to expand production, storage, and crude supply capabilities at its Laurel and McPherson, Kan., refineries, the company said.

Once CHS has completed all of the projects planned for the Montana and Kansas refineries in 2019, the company’s total refining capacity will increase by as much as 33% to about 160,000 b/d from 120,000 b/d, according to Debertin.

The company said it will begin unidentified projects related to the Laurel refinery upgrade this fall.