SPY366.69-0.10 -0.03%
DIA300.06+0.88 0.29%
IXIC12,377.18+27.82 0.23%

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

· 11/19/2020 16:25

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 logo

"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

 


Forecast

Actual
 + 2020
Forecast


Forecast

 

2020

2021

2022

2023

2016-2020

2021-2025

 

(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 contracting

162

 

189

 

154

 

150

 

714

 

730

 

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.