Benzinga | Nov 19, 2020 04:25PM EST

MDU Resources Outlines 5-Year Capital Investment Plan

MDU Resources Group, Inc. (NYSE:MDU) today announced that for the years 2021 through 2025 it expects to make capital investments totaling over $3.0 billion.



"MDU Resources continues to experience significant growth across our balanced mix of businesses, and we believe the capital investment plan demonstrates our commitment to organic growth," said David L. Goodin, president and CEO of MDU Resources.

Acquisitions would be incremental to the company's 2021-25 outlined capital investment plan. The company will provide updates as it identifies opportunities outside the plan.

Capital Expenditures

Actual Forecast + 2020 Forecast Forecast

2020 2021 2022 2023 2016-20202021-2025

(in millions)

Regulated energy delivery

Electric $115 $141 $182 $109 $620 $631

Natural gas distribution 183 215 225 188 869 973

Pipeline 79 230 74 110 287 508

377 586 481 407 1,776 2,112

Construction materials and services

Construction materials and 162 189 154 150 714 730 contracting

Construction services 82 46 34 35 247 189

244 235 188 185 961 919

Total* $621 $821 $669 $592 $2,737 $3,031

* Excludes "Other" category, as well as assumed net proceeds from the sale or disposition of property.





The company anticipates its electric and natural gas utility will grow its rate base by approximately 5% annually over the next five years on a compound basis. MDU Resources' utility operations are spread across eight states where customer growth is expected to continue at a rate of 1-2% annually. Customer growth, along with system upgrades and replacements needed to supply safe and reliable service, will require investments in natural gas distribution and new electric generation and transmission. The construction of an 88-megawatt simple-cycle, natural gas-fired combustion turbine near Mandan, North Dakota, announced in February 2019 is included in the outlined capital expenditures forecast as well as expenditures related to the retirement of the company's three wholly owned coal-fired electric generation units.

The capital investment plan at the pipeline business reflects a continued focus on organic growth. Included in the plan is the North Bakken Expansion project, which is expected to be in service in late 2021 and as designed will increase capacity by 250 million cubic feet per day, based on long-term customer commitments. As designed, this project is readily expandable through additional compression as Bakken production growth rebounds and additional takeaway capacity is needed. This business is exploring additional organic growth projects including potential industrial related projects due to low natural gas prices.

At the company's construction materials and services businesses, the capital expenditures forecast is focused primarily on organic expansion opportunities, and normal equipment and plant replacements and upgrades. Included in the outlined forecast is construction of a new prestress concrete plant in Spokane, Washington, where the company recently acquired prestress assets, several new materials plants and a state-of-the-art training facility for employees. Development of the company's Honey Creek Quarry in Burnet County, Texas, is underway and is included in the forecast. The construction businesses continue to explore acquisition opportunities, as demonstrated the past several years, which would be incremental to the five-year forecast.

The capital program is subject to continued review and modification. Actual expenditures may vary from the estimates due to changes in load growth and regulatory decisions, as well as other factors.