HANNAFORD, N.D. -- Officials see a new propane terminal in Hannaford, N.D., as a way to combat the shortages and high prices seen last year. The $6.5 million terminal is a project of CHS and Central Plains Ag Services and will bring propane from the Oil Patch to users in eastern North Dakota.
The terminal will operate under the CHS propane terminal name.
"This is a result of a two-and-a-half-year effort," says Matt Kumm, propane marketing manager for CHS. "We looked at where to place a terminal, and Hannaford was the logical place."
Previously, most propane marketed in eastern North Dakota was delivered by the Cochin Pipeline from Canada, Kumm says. Kinder Morgan Energy Partners, owners of the Cochin Pipeline, reversed the flow of the pipeline to deliver refined products from Illinois to Canada. This led to shortages and high prices last fall and winter, says Ken Astrup, general manager of Dakota Plains Cooperative in Valley City.
"This will help considerably," he says. "Last winter, we had to pull (propane) from eight states and two Canadian provinces."
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The Hannaford terminal will take delivery of propane by rail, Kumm says. The bulk of the propane will come from a CHS-owned loading facility in Ross, and originates from the Bakken oilfields. CHS also has suppliers in Canada for diversity in case the supply from the Bakken is interrupted.
Kumm says the terminal and storage tanks will allow the company to control part of the supply-and-demand equation.
"CHS has established long-term relations to ensure safe and reliable supplies," he says.
Variations in weather and rail shipping schedules are more difficult to control, Kumm says.
"A pipeline could be turned off and on," he says. "Rail transportation has to be planned."
The facility can unload two 24-car rail shipments each week. Each shipment of 24 cars amounts to about 750,000 gallons of propane. Tanks at the terminal can store about 1 million gallons of propane.
Astrup estimated the terminal will serve suppliers in a 100-mile radius.
Joe Schnichels, project manager for CHS, says the terminal uses automated loading, allowing truckers access to the facility around the clock without staff members. A tanker semi can be loaded with propane in about 20 minutes with a bill of lading printed for the driver before he leaves the facility.
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Schnichels says the terminal began operations in March, although storage tanks are still under construction.
"The summer season is a good season to test systems," he says. "Everything worked well."
The Hannaford terminal is one of five CHS constructed across the northern tier of states for a total investment of about $25 million, Schnichels says.
