CHS Inc. announced plans March 12 to expand production capacity at a newly acquired refinery in McPherson, Kan. The $327 million project will boost capacity 18% by its completion in early 2016.
CHS is in the process of acquiring 100% ownership of the National Cooperative Refinery Assn. facility from current minority partners Growmark and MFA Oil.
The expansion will begin this spring and occur in stages. The first phase will boost refining capacity from its current 85,000 barrels per day to 100,000 barrels per day. Completion of the project will take place in the second half of 2015 and the first few months of 2016.
A $555 million coker replacement project is already in the works at the facility, and refining production is slated to operate normally as the replacement and expansion projects take place.
CHS said it has committed more than $1.4 billion over the past 24 months to expand and upgrade its refining, pipeline and distribution system to further strengthen dependable supplies of refined fuels to its owners and customers. The additional production in Kansas will complement the 55,000 barrels per day produced at its refinery in Laurel, Mont., and will be equally divided between diesel and gasoline to meet customer demand.
Meanwhile, CHS announced late last month that it had launched a joint venture with Adecoagro to grow and process sunflower products. The 50/50 joint venture, to be known as CHS Agro, will expand the cooperative's presence in South America.
The venture will be based in Pehuajo, Argentina, in what CHS described as the "heart of sunflower country." Located roughly 350 km from the port at Buenos Aires, Argentina, CHS Agro will grow and process sunflower kernel and in-shell products for global marketing and distribution by CHS.
In its 10th year of operation, Adecoagro owns more than 283,000 hectares of farmland and several industrial facilities in productive regions of Argentina, Brazil and Uruguay. The company produces more than 1 million tons of agricultural products, including corn, wheat, soybeans, dairy products and ethanol.
CHS said its global customers, including food companies in Europe, the Middle East and the Pacific Rim, increasingly want quality sunflower products for food, baking and snack applications, and the new venture will provide the co-op with additional origination to capture that demand.