CHS Inc. said Thursday that it will spend $350 million to acquire full ownership of an oil refinery in McPherson, Kan., the farmer-owned cooperative's second significant acquisition in less than two weeks.

CHS, based in Inver Grove Heights, already owns 74 percent of the refinery. It will acquire the rest from two other owners, Growmark Inc., of Bloomington, Ill., and MFA Oil Co. of Columbia, Mo.

The cooperative, which sells fuel under the Cenex brand, made more money than ever in 2011, helped by dramatically higher profits from refining crude oil. Its $25.3 billion in revenue placed it just behind 3M Co. among Minnesota's biggest companies.

Last week it added to its food business with a $133 million acquisition of an Israeli soy protein maker.

The cooperative, which has a wholly owned oil refinery in Montana, said the remaining stake in the Kansas refinery will be acquired in stages through Sept. 1, 2015.

Jay Debertin, CHS executive vice president and chief operating officer for energy and foods, said in a statement that the acquisition is part of a strategy to make the co-op "the leading energy supplier to rural America."

CHS said the Kansas refining operation, the National Cooperative Refinery Association, was created in 1943 with the purchase of the former Globe Refinery by five farmer-owned cooperatives. It produces 85,000 barrels per day and has offsite storage at Conway, Kan., 1,500 miles of pipeline and a terminal in Council Bluffs, Iowa.

CHS also owns a 55,000-barrels-per-day refinery at Laurel, Mont., along with crude and products pipelines and refined fuels terminals.

The 650 employees of the Kansas operation will become CHS employees when the purchase is completed in 2015, CHS said in a statement.

The oil refining business has been good for CHS in the past year, helping to drive up pretax earnings 169 percent last year -- more than half the company's pretax profits.

Midcontinent benchmark

Midcontinent refiners like CHS have benefited from lower crude prices compared with competitors on the East and Gulf Coasts. That's because of an oversupply of crude oil delivered to Cushing, Okla., where the midcontinent benchmark is set.

That may soon change, however. A recent decision by new owners of the Seaway crude oil pipeline to reverse its direction between Texas and the Midwest is expected to reduce the Cushing, Okla., oversupply and boost crude oil prices there, according a report last month by Fitch Ratings.

Lani Jordan, spokeswoman for CHS, said in an e-mail that the acquisition is a long-term advantage for the co-op, which didn't assume when structuring the deal that the refinery's current crude-oil pricing advantage will last. "We structured and paid a value that reflects a long history of our experience in this market and not what we experienced the last 12-18 months," she said.

David Shaffer • 612-673-7090