N.D.: Biodiesel plant in Minot shelved

N.D.: Biodiesel plant in Minot shelved

	Published : Fri, 29 Jun 2007 21:13 By : Agencies Print this Story

BISMARCK, N.D. (AP) - A plant to make biodiesel from canola has been shelved after an economic development group withdrew its offer to provide land. The decision comes after more than two years of planning and millions of dollars in design and engineering work.

Dakota Skies Biodiesel LLC had been planned for about 110 acres in southeast Minot. Chief Executive Officer Jeremy Dockter said Friday he is 'perplexed' by the decision of the Minot Area Development Corp. board of directors.

The project, initially pegged at $75 million, has been spearheaded at various times in its history by groups ranging from European investors to the North Dakota Farmers Union. When the project initially was unveiled in March 2005 at an energy conference in Grand Forks, it was billed as the largest biodiesel refinery in North America.

Dakota Skies was bought by a New York investment group called the Kinetic Group late last year, with plans to expand it and make oil for food products, as well.

Jerry Chavez, president of the Minot Area Development Corp., said in a statement that 'a lack of progress from the plant's parent company' was the reason behind the development group's decision not to give Dakota Skies the land.

'A succession of ownership and management changes at Dakota Skies proved challenging to the contract' under which the land would have been awarded, Chavez said. 'We need to move on and shift our focus to projects that better meet our goals and the needs of the Minot area.'

Dockter said 'millions' of dollars in private money had already been spent on the project, on such things as site design, engineering and groundwork at the site in southeast Minot. Ground was broken last fall, when the project was under a different management group.

The work 'is not transferable to a new site,' Dakota Skies said in a statement. 'In short, not being able to build on that particular tract of land means the project Dakota Skies has designed cannot proceed.'

Dockter said Dakota Skies offered to buy the land from the development corporation but was rebuffed. The project's main lender now plans to foreclose on the project assets and liquidate them, he said.

'It's quite a quick, abrupt end,' Dockter said.

The project included Dakota Skies' two subsidiaries -- Magic City Biodiesel LLC and Magic City Oil Seed Products LLC.

Chavez's statement said the group wanted 'to focus its efforts and funds on projects more likely to come to fruition.' He said the decision not to award the land was made because of the biodiesel project's many delays and changes.

'There was a variety of things we looked at,' he said. 'Internally, we'll go back to look to see how that property fits into our strategy to attract agribusinesses.'

The North Dakota Agricultural Products Utilization Commission, a Commerce Department program that provides grants to developers of North Dakota farm products, provided a total of $52,500 to the Dakota Skies project through its history, spokeswoman Inez Ryberg said.

Dockter said no other public money was used.