Big Plans At Napa

Napa Junction — already a hive of activity with an operational grain loading facility and a pelleting plant under construction — could be getting even busier as officials look into building a natural gas pipeline to the area and an ethanol plant at the site.

The last year and a half has seen a grain shuttling facility opened and a pelleting plant beginning to take shape at Napa Junction.

Now, Napa Junction may be achieving new heights in the near future.

An ethanol plant and a private natural gas pipeline to feed the operation — along with much of southeast South Dakota — are on the table for the development.

Matt Winsand, general manager of Dakota Plains Ag., LLC, told the Press & Dakotan Thursday it’s a chicken-and-egg situation.

"To build an ethanol plant, you’ve got to have natural gas," Winsand said. "That’s a thing we’ve been working here at Dakota Plains on for quite a few years. We know we needed it for a project like that."

He said most options quickly became prohibitively expensive.

"We worked through Northern Natural (Gas), that owns the physical gas line that comes into Yankton," he said. "What we found out is, sure, the gas line to Yankton is probably OK, but the whole system to push gas there needs to be redone. Instead of building a simple gas line out to Napa from Yankton, you’d have to redo the whole infrastructure all the way down into Missouri."

The price tag for such an endeavor — an estimated $87 million.

As a result, Winsand started seeking other sources.

"I started working with some independent gas guys that I know," he said. "They’re building gas lines all over the U.S.; they’re building one right now in Michigan for a soybean crush plant."

He said the estimate on this option would be around $30-33 million.

And it wouldn’t just be entities at Napa Junction that could benefit.

"A private gas line in South Dakota is possible," he said. "You can put one in as long as you keep the number of users under 50 users. For example, if I put the gas line in and designate it to Napa Junction, Napa Junction would be the first tap. Let’s say, on the way from the Interstate (where the main gas line runs) to Napa, the City of Volin would like to put a tap on so the people in that area could have natural gas. That would be considered one tap, even though the City of Volin — once they were to tap it — can take their pipe and become a public utility to get everybody in town on it."

He said the project would take around a year if the state approves it.

"Nothing’s been set in stone with (the state)," he said. "But they’re willing to listen to the options that we’re bringing to the table. It’s not a Napa Junction pipeline fix; it’s a southeast South Dakota opportunity."

The pipeline doesn’t necessarily have to start construction next year, but at least be available in order for the ethanol plant to come online.

As for the ethanol plant, Winsand said there’s been a great deal of interest in bringing one to Napa Junction.

"We’re in talks with a couple of ethanol companies that want to build an ethanol plant at Napa," he said. "We’ve got a lot of the pieces in place. We’ve just got to figure out who all of the partners are going to be in it. We’ve got engineered drawings being done and designs being done with Fagen Engineering— they’re kind of the leader of the industry when it comes to building ethanol plants, so that’s who we decided to team up with."

He said he’s hopeful dirt will start moving in 2019. He added that entities are still hashing out some items, such as size and scale.

There’s one entity that Winsand absolutely wants to involve in the ethanol plant — local farmers.

"I’d like to make sure this gets farmer involvement," he said. "I’m hoping that the companies that are looking at building an ethanol plant will allow some farmer equity so that farmers have a share in the project as well. I think that ties nicely together as their project."

Should the project successfully clear every hurdle, it will still be some time before it would be operational, according to Winsand.

"Once the groundwork is done, which will probably take us four or five months, a typical build (takes) 18-24 months," he said.

Yankton County Commission chairman Todd Woods told the Press & Dakotan he’s on board with the ethanol plant idea.

"For me, it’s a win-win," Woods said. "If the ethanol plant comes to fruition, it’s another place for our farmers to sell their grain and get a better price for their grain."

He said the addition of gas capacity would also be a benefit.

"I know other manufacturers would like to expand, but with natural gas being limited to what it is, they can’t grow their business," he said. "It’s also going to be a win for the residents of Yankton who would like to get natural gas to the homes that don’t have that option now. The lake area is one of those areas that cannot get natural gas. It’s really a great opportunity for Yankton and one I’m excited to see come in front of us before the year ends."

A conditional-use permit for the ethanol plant will appear before the County Commission during a special year-end meeting set for Dec. 28 at noon at the Yankton County Government Center.

Woods said this is yet another sign of how Napa Junction has driven development.

"It just goes to show how much economic development has been going on the last four years," he said. "I know it took a little bit of time out at Napa Junction to get a second business there. But you’re seeing two businesses in the last six months, essentially, adding out there — that’s more tax base that will keep everybody else’s taxes low. I’m excited about the opportunity, and also excited about the opportunities it’s going to bring our farmers, our residents and also the other businesses in the community with the expansion of natural gas."

Winsand said he has an established track record of making things happen at Napa Junction.

"I’ve had a lot of naysayers who said, ‘Napa will never get built. They’ll never even build an elevator there,’" he said. "Lo and behold, we get the elevator done. It’s not a matter of ‘if they will come.’ They’re here."

 

Follow @RobNielsenPandD on Twitter.

 

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