CHS Inc. and the two minority owners of the National Cooperative Refinery Association have reached agreement to transfer full ownership of the petroleum refiner to CHS, currently its majority shareholder.
Under the agreement between CHS of Inver Grove Heights, Minn.; Growmark, Inc., of Bloomington, Ill., and MFA Oil Co. of Columbia, Mo., CHS will purchase additional interest in the McPherson, Kan., refinery in annual increments beginning on Sept. 1, 2012. The four transactions will culminate on Sept. 1, 2015. CHS currently owns 74.4 percent of NCRA, with Growmark and MFA Oil holding 18.6 percent and 6.9 percent respectively.
"As the nation's leading cooperative energy company, becoming the sole owner of NCRA is an important part of adding value for our members through CHS strategic direction as the leading energy supplier to rural America," said Jay Debertin, CHS executive vice president and chief operating officer Energy and Foods and currently chairman of the NCRA Board of Directors.
NCRA was created in 1943 with the purchase of the former Globe Refinery by five farmer-owned cooperatives. Today, NCRA consists of an 85,000 barrels-per-day refinery, along with offsite storage at Conway, Kan., 1,500 miles of crude oil and refined products pipeline, and a terminal in Council Bluffs, Iowa. In October, NCRA announced it will construct a new $555 million Delayed Coking Unit at the refinery beginning in 2013, replacing a 60-year-old system. While the new coker will not increase overall refinery production, it will be built to accommodate potential future expansion.
CHS also owns a 55,000 barrels-per-day refinery at Laurel, Mont., along with crude and products pipelines and refined fuels terminals.
NCRA's 650 employees will become CHS employees when the purchase is completed in 2015.