North Dakota ethanol plant to reopen
FARGO -- The idled Hankinson, N.D., ethanol plant has been sold, and the new owner plans to reopen it as soon as Saturday.
Murphy Oil, based in El Dorado, Ark., said Thursday that it's buying the corn-based plant for $92 million.
The company plans to invest an additional $15 million in working capital into the plant, which can produce up to 110 million gallons of ethanol annually.
All 49 employees will be retained at the plant, which will be manufacturing ethanol by Saturday, plant Manager Wes Plummer said in a news release from the office of North Dakota Gov. John Hoeven.
Dory Stiles, a company spokesman, told The Forum the plant will reopen "as soon as possible."
The plant, which opened in 2008, has been idle for about a year.
"This is great news," Hankinson Mayor Joseph O'Meara said when informed of the sale by The Forum.
Hankinson, in southeastern North Dakota, has about 1,000 residents.
"We've always had high hopes" that the plant would reopen, he said.
O'Meara said he looks forward to learning more about Murphy Oil. The company is an oil and gas exploration and production business that operates worldwide. The Hankinson facility is its first ethanol plant.
"Given the current ethanol mandates and our subsequent blending needs, having more of a presence in the supply chain better balances our business," David Wood, president and chief executive officer of Murphy Oil, said in a news release.
Congress has mandated that the United States increase its biofuels production from 11.1 billion gallons this year to 36 billion gallons a year by 2022.
The Hankinson plant, with construction being completed in 2008, has been idle as a new owner was sought.
Former owner VeraSun, a Sioux Falls, S.D.-based ethanol company, ran into financial problems and filed for Chapter 11 bankruptcy protection last fall.
The ethanol industry in general has struggled because of falling energy prices and higher production costs, although corn prices have dropped sharply since last fall.
A group of lenders led by AgStar Financial Services took over some of VeraSun's plants, including the one in Hankinson.
AgStar, based in Mankato, Minn., provides financial services to agriculture and rural communities.
"Murphy Oil Corp. has a long tradition of being part of the communities they serve, and we're excited to know this plant will soon be running again," Paul DeBriyn, president and CEO of Ag Financial Services, stated in a news release.
"This sale will provide jobs, create opportunities for area farmers to sell corn and produce ethanol, which is good news for the industry," he said.