Skyland Grain LLC announced plans to construct a new 3 million-gallon fuel storage tank farm west of Ulysses to serve its western Kansas farm customers and address persistent summer fuel shortages.
Officials hope to have the state-of-the-art operation up and running by mid-summer, said Paul Sack, energy director for Southwest Kansas Coop Services, a subsidiary of Skyland Grain that will operate the facility.
The tanks will be located just west of Ulysses on the property Skyland Grain bought in July of 2018.
The ground was originally being developed as an ethanol facility by a now-defunct Los Angeles-based company using foreign investment, so rail was installed on site for shipping of the product.
While most fuel will come in by truck, SWKS Co-op will be able to take advantage of the rail already installed to ship in fuel by train when the market allows, a news release from Skyland Grain stated.
In recent years, Sack said, the region has seen the closure of two of its three fuel supply terminals — at Turpin, Oklahoma, and Phillipsburg — leaving only the Scott City terminal to supply the co-op's needs.
With the resulting increased traffic at Scott City, as well as issues with that facilities aging pipeline and its ability to restock fuel, there have been numerous fuel outages over the last three years.
“What happens is during the busy times of year they can’t pump enough fuel to the terminal to meet demand,” Sack said. “In the last two years, they’ve been out of fuel at probably 45 percent of the time.”
That’s forced the co-op to drive more than 100 miles east to the McPherson refinery or Sunray, Texas, to buy fuel, leading to supply and delivery issues for its customers. There’s a smaller terminal at Great Bend, Sack said, but it also often has shortages.
“The problem is, when you’re selling large amounts of fuel, you can’t get enough trucks running to keep a steady supply,” he said. “The idea is, if we can fill it in January, February and March, when it’s slow, we’ve got the fuel available in May, June and July, when we most need it. Then we’ll try to refill again in August and September, so it’s available in October and November for harvest.”
The new tanks will also allow them to offer new options for patrons to purchase fuel, including Automated Farm Delivery.
“SWKS Co-op will still have all of their current products and services available, but with the addition of this new facility will be in a better position to guarantee fuel supply to our patrons,” the company release stated.
Plans are to install a pair of tanks — one holding a million gallons and the other two million — at the facility, which will be built on site. The tank farm will also require various piping for loading and unloading fuel from the tanks, as well as a computer system and software.
Officials declined to say how much the project will cost.
“We’ve been looking into this for several years, Sack said. “It’s really about keeping a steady supply for our customers in this part of the county. We do a lot of farm delivery. That’s our main business, delivering to farms and harvesters. This facility will be a huge step forward for the fuel supply chain in southwest Kansas.”