Career Bakken Achievement

This spring, construction of the Bakken's largest transload facility begins. The project's development was led by Neil Amondson and his story in making the facility a reality reveals intricacies of making large-scale projects happen in the Bakken.
By Luke Geiver | May 13, 2014

We are creeping up the backside of a hill on a barely used gravel trail, the truck scrunching the light brown pasture grass and gravel bits beneath us. The wind is howling but we can still hear the tires. The cattle gate behind us rests on the side of the trail where we left it, Neil Amondson, the driver and developer of what we are about to see, too excited to reattach the gate. After two hours of driving in and around Williston, N.D., we’ve made it to a trail leading up to the top of a hill—our destination. When we reach the top of the hill, Neil parks the truck and we pause before stepping out. “We can see it all from here,” he says. The all he is referring to is the culmination of four years Amondson spent negotiating with landowners, meeting with site developers and convincing investors that building the Bakken’s biggest transloading facility ever on the border of North Dakota and Montana makes sense. For the first two hours of the day, Neil tells me everything about this transload facility and about this hill and the view that it offered. When we step out of the truck, Neil walks out ahead of me, places his hand over his forehead to block the early morning sun. The hard wind messes his hair in only seconds. I take his picture on the top of that hill without him knowing, and then turn the camera to the direction of Neil’s stare down below the hill. There is nothing there. 

The Vision
Neil Amondson has the eye of a developer, of someone with the ability to envision future large-scale projects on the huge flat wheat fields of North Dakota that exist today. Like so many impacted by a struggling economy in other parts of the country circa 2008, Amondson has endured success and hardship in less than the past decade. His hardships happened in the state of Washington, something unique to him, his success is happening in the Bakken, something common to many. When Amondson arrived in Williston, N.D., five years ago, he knew he had the opportunity to rebuild his life and career as a major land and commercial developer. His only problem was that he didn’t know where to start. “Five years ago I was looking for an opportunity to rebuild and to reengage. When I got to Williston, I remember calling home and telling them that this was exciting, but at that time there was nothing in the news. If there was, they would call this the bacon.”

During his first year in the Bakken, Amondson put more than 100,000 miles on his truck. He was looking for developments ranging from truck stops to clinics to transload sites. Like so many others, Amondson was paralyzed by the endless possibilities for developments. “The biggest thing I learned from Washington,” he says, “is to have determination. In order to see a project through, you have to stick with your dream and actually try and live it out.”

To do that, he lived in an RV before renting an apartment in Williston. His immersion into the local Bakken scene of Williston and the surrounding communities helped him understand what it would take to build a massive project. His wife and family remained in Washington. As we stopped at a BNSF crossing line running into Williston, it was easy to see his interest in freight, products and creating a facility for both. As each rail car zoomed past, he named their origination and, though it may be hard to verify, their contents. His desire and experience with aggregates and freight combined with his interest in building a hub for inbound and outbound products led him to a small-but-growing town on the border of North Dakota and Montana: Fairview. Just north of the town, there is a 2-mile stretch of flat land. It is interrupted by an irrigation ditch, a few houses, a cemetery, an old gravel pit and some random trees. On one side is North Dakota, on the other, Montana. A BNSF-owned and operated line intersects the property, connecting BNSF’s mainlines to the north and south.

When we drove to the top of the hill, Amondson wanted to see the ground in its entirety. He even joked about building a cabin on the hill, but, after construction starts this spring, the sound of cranes, bulldozers and trucks will be a constant before someday evolving into the clang of railcars joining together. “I don’t think my wife would enjoy that,” he said, smiling at the site of the ag fields, the gravel pit, trees and cemetery below us, knowing that it would all transition from a career daydream to a Bakken reality. After working on three other projects that had only made it to the design phase in the Bakken, the transload facility Amondson spearheaded will someday be operational. He had to earn the trust and support of several local community members including ranchers, landmen and everyone in between, a trust on display when we visited a rancher’s house and had lunch with a handful of Fairview residents later that day after our stop at the top of the hill.

Amondson is more satisfied with his ability to gain their trust and in helping the entire group to reshape the Fairview community in a positive way than he is in leading the development of the transload facility, it seems. As we drove around during that windy, blue-sky day looking at other transload facilities for comparison, it was evident that the success of Amondson has enough resonating power to be told by itself. But for anyone interested in learning the ins and outs of a grand development in the Bakken, or the history and early days of a site set to become a Bakken hub for years to come, look no further than the Northstar Transload facility.

The Largest of Its Kind
After choosing the spot, Amondson sought out the Minneapolis-based investment group Hempel Companies. The Hempel team arranged the financing for the facility. According to Amondson, the transload facility will create a payback period of roughly three to five years. The design of the facility includes more than 800,000 barrels of storage, 160,000 barrels of oil per day outbound capacity, proppant storage and a train track design that features linear tracks instead of circle tracks, a design element that doesn’t cost Northstar acreage in the middle of a circle track.

Just north of the facility there are four other transload facilites: Hiland Crude, Pioneer, Musket and Savage. BNSF will serve the transload facility, thanks to a unique set of circumstances. “When I first found the site I didn’t really appreciate the location,” he says. In 2011, a winter storm shut down the BNSF mainline to the north. The storm prompted BNSF to take over the line running between the shut-down line and BNSF’s other mainline south of Fairview. Now, the line that runs through the Northstar site is a freight-only mainline operated by BNSF.

The geographical location of the site allows customers coming from the Montana side to bring loads to the facility at a lower price than loads coming from North Dakota. Montana has bigger payloads for hauling materials on its road system, according to Amondson, a benefit to the customers. The facility is also closest to the western U.S., Amondson is already planning to receive continued shipments of Asian proppants and other manifest loads.

“We’ve been encouraged by early interest,” he says, but as is typical of the Bakken, “they want to see you build it before they commit.” Although there some potential customers of the site are hesitant to sign on, others have signed contracts to use the facility.  “We have a lot of people saying great idea, great concept, and to give us a call when we complete it. We will actually have more growth after the project is built.”

No other transload facility will have the oil storage capacity or the proppant storage capacity of Northstar's, although Amondson hadn't planned it that way. “It has become a bigger project than what we envisioned. It is a blessing but also requires more financing, and a little bit more of everything,” he says. After meeting with several transload experts and site developers, Amondson realized that bigger would be best for the Bakken and that he couldn’t worry about the size of the project and it’s accompanying price tag. When all of the developments surrounding the facility are complete, the total could surpass $1 billion. 

Because the facility is going to be big, it allows the unit costs associated with it to be lower due to higher throughput and storage capacity. The NorthStar facility will generate revenue on a per barrel price for crude and tonnage basis for proppant or other bulk commodities. Although the facility is in McKenzie County, it is still somewhat far away from the main oil action. “It was a challenge to really get people to believe in the idea of this being so far out. Fairview is not on the normal map of where things are like Tioga, Dickinson, Minot or Williston,” he says. The facilities proximity to gravel pits, to existing and planned pipeline and the skeleton of the site, however, made the site incredibly attractive to investors even as the price tag to complete it grew.

When the facility is officially operational, Amondson’s work in the Bakken won’t be over. He is also in favor of a refiner looking to build adjacent to the transload facility, he is planning a truck stop and other industrial sites next to the transload site, he will continue to operate gravel pits nearby and when he is all done with that, he will most likely get back in his truck with the confidence of knowing what it takes to develop a pillar-scale location in the Bakken.

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Author: Luke Geiver
Managing Editor, The Bakken magazine
lgeiver@bbiinternational.com
701-738-4944