Mergers & Acquisitions

CHS completes purchase of remaining stake in Kansas refinery

CHS completes purchase of remaining stake in Kansas refinery
CHS Refinery at McPherson, Kan. (PRNewsFoto/CHS Inc.)

CHS, a leading energy, grains and foods company and the leading farmer-owned cooperative in the United States, announced on Sept. 1 that it has completed its purchase of the National Cooperative Refinery Association (NCRA) petroleum refinery and related operations based at McPherson Kan., U.S.A., and is now its sole owner. The refinery has been renamed the CHS Refinery at McPherson, Kan.

“As the nation’s leading cooperative energy company, becoming the sole owner of this refinery and its related pipelines and terminals is a critical step in adding value for our member-owners and other customers,” said Jay Debertin, CHS executive vice president and chief operating officer, Energy and Foods.

“Given our 70-year history with this well-run operation and its 700 dedicated employees, we’re proud to make this operation fully part of CHS.”

Today CHS sells more than three billion gallons of gasoline and diesel fuel products annually and markets the products under the Cenex brand at more than 1,500 Cenex-branded retail locations. Combined, the CHS refineries at McPherson, Kan., and Laurel, Mont., help meet their customers’ growing needs for both diesel fuel and gasoline.

“We are continually in the market for diesel fuel to meet our member-owners’ demand,” said Jim Loving, CHS senior vice president, refining, pipelines and terminals, and past president of NCRA. “Through sole ownership of this operation, along with additional investment to increase capacity, we’re essentially adding the equivalent of a third refinery to serve our owners and customers who highly value the additional diesel supply.”

The CHS refining story began in 1943 when wartime shortages of petroleum products made it difficult for cooperatives to obtain the fuel they needed for their farmer and cooperative-members. CHS purchased the refinery at Laurel, Mont., and within months an association of regional farm supply cooperatives, including CHS, was formed to purchase the refinery at McPherson, Kan.

Under cooperative ownership, the refineries have seen continual modernization and expansion. From a combined crude oil capacity of 25,000 barrels a day in 1943, they now have a combined capacity to produce 142,000 barrels a day. Expansion projects will take them to the 157,000 barrel-per-day mark in 2016, and proposed plans will bring production to 166,000 barrels per day in 2019.

In 2011, CHS announced it would purchase the shares of two minority owners.

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