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MDU Resources Drops Plans For Gas Pipeline in North Dakota

With a collapse of plans for a highly promoted multi-billion-dollar fertilizer plant in the state, North Dakota-based MDU Resources Group's pipeline unit on Wednesday pulled its application at FERC for a 96-mile, 20-inch diameter natural gas pipeline that would have served the proposed plant.

The prospects for MDU's WBI Wind Ridge Pipeline became doubtful last August when St. Paul, MN-based agricultural cooperative conglomerate CHS Inc. decided to drop its plans to develop a major natural gas-based fertilizer plant (see Shale DailyAug. 17). On Wednesday, WBI Energy withdrew its pre-filing application at the Federal Energy Regulatory Commission for the proposed pipeline extension and a related compressor station near Spiritwood, ND.

Originally touted three years ago, the project was endorsed by North Dakota Gov. Jack Dalrymple as the largest single private investment ever proposed in the state. The plant was slated for 200 acres in Spiritwood and was expected to add 100-150 new jobs.

At the time, there were other major fertilizer plants proposed for North Dakota's robust Bakken shale play (see Shale DailySept. 14, 2012). None of them have come to fruition.

When it dropped plans for the fertilizer plant, CHS cited "construction costs, water supply challenges, overall risk profiles and the time required as contributing to the decision to abandon the project. At the same time, the agricultural cooperative reiterated its commitment to nitrogen fertilizer manufacturing by making a $2.8 billion investment in the sector through CF Industries Nitrogen LLC as a means of supplying its member cooperatives and farmer-owners.

"We concluded that we couldn't achieve the level of returns needed to justify the increased costs and risks," said CHS President Carl Casale, while acknowledging the "tremendous support" that the proposed fertilizer plant received from local and state officials in North Dakota. Casale held open the possibility of future investments in the state.

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