BISMARCK, N.D. (AP) — Basin Electric Power Cooperative's financially troubled synthetic natural gas plant in North Dakota could break even by 2024 following staff cuts and other cost-saving measures, the utility said.
Basin Electric CEO Paul Sukut recently announced recently that the Great Plains Synfuels Plant near Beulah "is in a much better place financially today even than it was six months ago," the Bismarck Tribune reported.
Plant operator and Basin subsidiary Dakota Gasification Co. has been struggling to compete with cheap natural gas made available by hydraulic fracturing in the Bakken oil field. The plant has suffered about $212 million in net losses over the past three years.
The cooperative experienced a net loss of $57.3 million in the first six months of 2018, well above the company's $30.3 million loss in the first six months of 2017, according to its latest financial statement.
Utility rate increases have helped keep the cooperative afloat.
More than 300 Basin employees took buyouts in August. The plant also switched to operating at 85 percent capacity, rather than 100 percent, which allows it to meet demand for products and run its fertilizer facilities year round.
Basin CFO Steve Johnson's financial report predicts that losses will continue at Dakota Gasification from $30 million to $50 million annually until 2024. But the cooperative expects a $550 million improvement over the next decade.
The company said benefits have outweighed losses by $1 billion over the plant's 30 years in operation.
"While there are still projected losses at DGC, the benefits to the Basin family of having DGC continue to operate are once again greater than the projected losses," Johnson said.
Sukut said fertilizer prices have risen this fall. He said the company could see a bottom line improvement of $25 million to $30 million per year, if the prices hold.