Flint Hills plans $300M in additional upgrades at Rosemount refinery

The construction boom at the Flint Hills Resources oil refinery in Rosemount is getting a second wind.

The refinery, which has 2,000 temporary employees working on a $400 million upgrade, says it plans to invest an additional $300 million in two new technologies. Those projects will enable the refinery to produce low-sulfur gasoline and a fertilizer byproduct and to generate half its electricity using energy-efficient technology.

Those projects, coming on the heels of the ongoing work, would employ an estimated 1,500 workers through 2016, Scott Lindemann, vice president and manufacturing manager, said in an interview Tuesday. About 20 permanent jobs would be created, he added.

In one project costing about $150 million, Flint Hills said it plans to install a turbine that burns natural gas to generate electricity. The turbine's waste heat would be collected, producing steam to run refinery processes or to boost electrical output using a second, small steam generator.

"Sometimes we need more steam, and we can get more steam," Lindemann said. "If we need less steam, we can turn that into more power generation."

This type of power generation is known as "combined heat and power," and gets high marks for energy efficiency because otherwise wasted heat is recaptured and used. The recaptured heat from power generation reduces the need to operate less-efficient, stand-alone boilers.

Lindemann said the power plant, to be built in the southeast corner of the refinery, would supply about half its power needs. Xcel Energy, based in Minneapolis, would continue to supply the remaining power.

In a second project, Flint Hills said it plans to install new technology, also costing about $150 million, to extract and process sulfur and nitrogen as it begins refining ultra-low-sulfur gasoline to meet stricter Tier 3 U.S. fuel standards in 2017.

The technology, Lindemann said, also will allow the refinery to produce a liquid fertilizer called ammonium thiosulfate (ATS) that will be marketed to farmers.

Ultra-low-sulfur fuel is already required in California to meet its tougher tailpipe emissions standards. The federal rule applying the standard nationwide was approved earlier this month.

Other technology is available to extract sulfur from crude oil. But Lindemann said those extraction methods would not create a high-value fertilizer — a new product for the refinery.

Flint Hills' Pine Bend refinery is the 12th-largest in the United States and supplies about half of Minnesota's gasoline. It also refines and sells diesel, jet fuel, propane, butane, pentane, sulfur and asphalt. It employs about 1,000 full-time workers.

About 2,000 temporary employees are working on an upgrade to maximize the output of the refinery. Company spokesman Jake Reint said the refinery is now rated at 339,000 barrels per day.

Lindemann said the refinery's engineering team began looking at energy-saving power generation with the encouragement of two environmental groups that were consulted about the planned upgrades and how they would affect emissions.

Scott Strand, executive director of the Minnesota Center for Environmental Advocacy, a St. Paul nonprofit that Flint Hills consulted, said he supports combined heat and power as a way to save energy and reduce greenhouse gas emissions. In 2008, that technology also was endorsed by the state Climate Change Advisory Group, a panel of the state Pollution Control Agency.

"Assuming that this project replaces power that would otherwise come from Xcel … it should be a net positive, and consistent with the energy efficiency goals we have discussed with [Flint Hills]," Strand said in an e-mail.

Lindemann said the two projects still need to undergo major engineering work, and must be approved by the Flint Hills board of directors. Flint Hills is a unit of privately held Koch Industries, but has its own board, Reint said.

In addition to the two refinery projects, Flint Hills plans to build another office building, costing $25 million, off 117th Avenue, said Don Kern, facilities/engineering manager.

David Shaffer • 612-673-7090 Twitter: @ShafferStrib