The NCRA story began in 1943. Wartime shortages of petroleum products had made it difficult for farm cooperatives to obtain the fuels they needed for their member-owners. To solve the problem, five regional farm supply cooperatives joined together and organized National Cooperative Refinery Association to purchase and operate the Globe oil refinery at McPherson, Kansas. In addition to the 15,000 barrel per day refinery which began operations in 1933, the acquisition included it's refined products pipeline from the refinery to Council Bluffs, Iowa, and the storage terminal there.

Under cooperative ownership, the refinery has been continually modernized and expanded. In 1984, a five-year refinery modification and expansion project was completed that increased crude oil capacity to 75,000 barrels per day--the third largest in Kansas. In 1993 NCRA completed a $120 million project that added a continuous catalytic reformer unit and distillate hydrotreater.  

In addition to the refinery and products pipeline, NCRA's facilities include the corporate headquarters office building at McPherson, an underground petroleum storage installation at Conway just west of McPherson and crude oil trucking and pipeline operations. NCRA also has ownership in several subsidiary companies involved in crude oil purchasing and transportation. NCRA became a 100%, owner of Jayhawk Pipeline, LLC in 1994.  

National Cooperative Refinery Association annual sales are in the $700 million range. Refined products are allocated to each member-owner in proportion to their ownership. Member's equity increased from $2 million in 1943 to $186 million in 1995 with total assets at $370 million. NCRA is guided by a board of directors representing each of the three regional cooperative member-owners. Including subsidiaries, NCRA has ~560 employees of which 420 are in the McPherson area.

Crude Oil Supply

Most of the refinery crude oil requirements are purchased from other oil producers in the mid-continent and west Texas region. This crude oil supply is transported to the refinery by pipelines. NCRA also has a crude oil gathering and trucking operation in Kansas to transport the oil from the leases to a nearby station or directly to the refinery.

In addition to its own pipelines, including the 100% owned Jayhawk Pipeline from southwest Kansas to central Kansas, NCRA is involved in joint interest common carriers including the 35% owned Osage pipeline from Cushing, Oklahoma to El Dorado, Kansas and the 33% owned Kaw pipeline crude gathering system in central Kansas. These pipeline systems provide NCRA with access to a variety of crude oil sources from Texas north to Canada.  Crude oil storage capacity at the refinery totals 1,150,000 barrels.   

Crude Oil Refining

As produced from the well, crude oil consists of a variety of hydrocarbons ranging from heavy asphalt to light gases. The purpose of an oil refinery is to convert this raw material into refined petroleum products. This is done through a series of refining processes some of which are physical in nature while others involve chemical reactions that change the molecular structure of the hydrocarbons into higher quality and more marketable products.  

The first step in the refining process is fractional distillation. After being heated and partially vaporized in a furnace, the crude is physically separated by a fractionating tower into several "fractions" of hydrocarbons grouped according to their boiling ranges. Some of these parts or fractions are finished products after only treating and blending. However, most of the crude oil fractions require additional processing in other downstream refinery units.  

After the major process units have done their complex jobs of separation and conversion, various treating processes and chemical additives are used to further improve the quality and characteristics of the refined products. Final product blending is done according to rigid specifications and is checked by the laboratory before loading into trucks or transferring to pipelines for shipment.  

An oil refinery is a complex maze of steel structures, tanks, fractionating towers, heaters, reactors, pumps, heat exchangers, instrumentation, utilities, and miles of connecting piping. Keeping this complicated industrial plant operating smoothly and efficiently requires the combined efforts of skilled craftsmen, trained operators, and technical staff personnel. Refineries operate continuously 24 hours a day, 7 days a week except for annual or biennial shut downs for repairs and maintenance.

Refinery Processing Units

After the initial fractional distillation of the crude oil, other downstream refinery units further process the various fractions. The heavy asphaltic reduced crude is converted to lighter oils and petroleum coke in the coking unit. The next lighter fraction from crude distillation is gas oil. This heavy oil along with coker gas oil is cracked in the catalytic cracking unit into lighter products in the distillate and gasoline boiling range. Certain distillates from the crude, coking and catalytic cracking units are further processed in the diesel hydrotreater to improve the quality and yield of diesel fuel. Other distillates are blended directly into finished products.

The low octane naphtha and gasoline fractions from the crude units are processed in a series of units designed to increase octane numbers as well as the overall yield of unleaded gasoline. Light gases from the crude oil along with gases produced in various refining processes are further processed into finished products or fuel gas. Except for the crude distillation step, chemical reactions are involved throughout the refining process.

Refinery Auxiliary Facilities

In addition to the main processing units, other supporting facilities, equipment, and services are necessary for the overall refinery operation. Utilities include water well, water treatment, cooling towers, steam boilers, and power distribution. Electricity and natural gas are purchased from outside suppliers. The refinery warehouse stocks spare parts, equipment and supplies. Quality control and testing services are provided by the laboratory. General office services including engineering, accounting, information services, purchasing, and human resources are provided.

Other than operations, the largest refinery department is maintenance and construction. The modern, well-equipped shop includes welding, pipefitting, machining, instrument and electrical, equipment repair, and carpentry. Field activities also include insulating, painting, rigging, and mobile crane and equipment operation. In addition to routine maintenance, the department assists with inspection and repair during the maintenance shutdowns about every one to two years. Various construction projects are also handled by the maintenance department.

Refined Products Distribution

Product components produced by the refinery process units are blended into finished products and stored in the refinery tank farm. Because of seasonal product demand fluctuations, over 2,000,000 barrels of product storage is provided at the refinery. After the products have been tested by the laboratory and meet specifications, they are ready for delivery. Except for residual carbon black oil and petroleum coke by-products, all refined fuels are sold to NCRA's three member-owners.

About 15% of the refined products are loaded into transport trucks at the refinery for delivery in Central Kansas. However, most of the product output leaves the refinery by pipeline for markets throughout the North Central states. Several common carrier pipelines are used as well as NCRA's McPherson to Council Bluffs, Iowa, products pipeline. At the Council Bluffs terminal, NCRA has storage for 600,000 barrels of refined products.

Underground Product Storage

Seven miles northwest of the refinery at Conway, Kansas, is located NCRA's underground storage facility. Storage is provided for approximately 4,000,000 barrels of petroleum products including, propane, gasoline and intermediate refinery feedstocks (butane and natural gasoline). The underground salt layer caverns average about 50,000 barrels capacity each. Pipelines are used to transfer products to and from the refinery and to various product terminals.