The parent company building the nation’s first greenfield refinery since 1976 in North Dakota has secured a silent partner to handle its midstream logistics.
Meridian Energy Group, which is building the Davis Refinery in southwestern North Dakota, announced Wednesday that it had signed a letter of intent with an industry leading firm for midstream logistics support. Midstream generally refers to pipeline companies.
The unidentified company will build, own and operate the crude oil and refined product midstream and logistics facilities for the greenfield refinery, which will allow Meridian to focus on operations inside the Davis plant.
The firm has more than 70 years of midstream experience, according to a media release from the company, but has asked to remain in the background, pending development efforts on assets associated with the agreement.
Lance Medlin is chief projects officer for Meridian on the letter of intent.
“The award of this contract for the Davis terminal marks the end of a long and intensive bidding and vetting process, and the beginning of what will become an even longer working relationship between our two companies,” he said. “This firm will execute a significant role in the Davis Refinery as they develop and operate our crude and refined product terminals and logistics infrastructure. We’re excited to start this new phase together as the Davis Refinery nears its full production date.”
Meridian has already broken ground for the Davis Refinery site, and is working on a final design and equipment fabrication for the plant. The company has said they intend to make the plant a game changer in the industry in terms of environmental impact.
Not only will the refinery recycle processed water to minimize water use, with the goal of becoming a sewer discharge facility, but they will use air cooling to minimize water use as well. They will also integrate heat into specific processes, helping to ensure no energy is wasted.
Flare stack combustion control will be employed to reduce emissions such as carbon monoxide, sulfur dioxide and nitrous oxides. The project will be the first of its size and complexity to quality as a minor synthetic source by air quality standards.
The plant will have a better, more efficient configuration, longer operating cycles, and higher output when compared to legacy refineries built decades ago.
The plant itself has a footprint of 150 acres, but the site is 715 acres in all, so that a buffer zone for wildlife habitat may be created. The company is also exploring partnerships with North Dakota State University to enhance educational and research opportunities.
Meridian Chairman and CEO William Prentice said the focus on being the most cost-effective, cleanest refined product producer in the industry means that Meridian needs to focus all its expertise inside the fence.
“This emerging partnership allows Meridian to do just that,” he said. “With this LOI in place, Meridian is assured that the Davis crude and product handling systems operate in the safest and most efficient manner possible. In addition, the arrangement reduces the capital burden on Meridian substantially, furthering Meridian’s objective of seeing Davis become the quality and cost leader in its market.”
The Meridian Davis Refinery has attracted protests and legal action as it has sought to build its new refinery in North Dakota, partly due to its proximity to Theodore Roosevelt National Park. Statewide, however, it has attracted something else — excitement.
That’s not just because of the 200 additional, permanent, high-paying jobs that the plant will create for the long haul, but also because the state will finally have a plant to process a substantial portion of North Dakota’s own resource in state.
This value-added component for the state’s oil and gas resource has been long-sought. It is also another component that can help reduce flaring, another long-standing effort in the state since the latest oil boom began.
Dan Hedrington with Meridian visited Williston before the project began to talk about the refinery and to potentially recruit services the plant might need.
“Meridian has a goal,” Hedrington said. “The first is employing North Dakota services and people, as much as we can. And not just people providing services, but employees. They’re going to hire as many people in North Dakota as they can for full-time work.”
Hedrington said the backers for the Davis Refinery are from a Belfield-area family, who grew up in North Dakota but had to move away for careers. They want to help create long-term jobs for their home state, so that future generations don’t need to move away for careers.
“Those people are in the 70ish area now,” Hedrington said. “They’ve done well in other parts of the country, but their heart is still in North Dakota. They want to come back and develop jobs here that are sustainable.”
Davis Refinery has said it would initially produce 27,5000 barrels per day of low sulfur diesel fuel, already contracted. Its output could be expanded to up to 49,500, helping to address a diesel fuel shortage in the state.
“We all know that most of the oil in North Dakota is shipped out and brought back in,” Hedrington said. “The bulk of it all leaves and gets refined elsewhere.”
Changing that dynamic would help North Dakota not only add value to its own resource, but potentially create new jobs in the process. In addition to the 200 permanent jobs for the plant, economists say up to an additional 12 times that number of jobs would be created in other sectors in the Belfield region.
“Meridian has asked for no money from the state for this,” Hendrickson added. “They have not received any tax benefit.”
Tax revenue from the plant, however, will more than double Billings County’s general operating fund, Hendrickson said.
Blackout Energy is an industrial equipment provider located in Williston, North Dakota that offers heaters, light towers, coolers, frack stands, and fuel rigs for other businesses. The views and opinions expressed in this article are strictly those of its authors and were not written by Blackout Energy. This article was originally published by Williston Herald.