Meridian Energy Group Receives Permit to Construct Davis Refinery

Meridian Energy Group Inc. (Irvine, Calif.) said June 13, that the North Dakota Department of Health’s (NDDoH) Air Quality Division had issued a construction permit for the company’s Davis refinery. Issuance of the permit came 18 months after the initial application filing and is based on a thorough review of the application documents and a three-month review of comments received during a 45-day public comment period.

Meridian is building a 27,500-bbld crude oil refinery located on more than 150 acres in Billings County, east of the Fryburg rail facility in Belfield, N.D. in the heart of the Bakken. The Burlington Northern Santa Fe rail line runs directly through the refinery site, facilitating the construction of a crude oil feedstock offloading and refined fuels uploading facility. The company comments that it is the first time a full-conversion refinery of its size and complexity has been reviewed and approved as a synthetic minor source. Now that the final construction permit has been issued, Meridian will proceed with design, engineering, procurement, and construction.

“The Meridian leadership team’s commitment to the lowest achievable emission rate technology was consistent throughout the process,” said Dan Hedrington, senior project manager for the Davis refinery. “The confirming review by the NDDoH was the most thorough review I’ve been involved with in my career.”

Meridian expects to have the initial plant operational in a little more than two years. Noted is that Davis will enjoy several competitive advantages, including its proximity to oil production, the use of low-cost natural gas to operate the plant, its direct access to major transportation infrastructure, and the business-friendly climate of North Dakota fostered by state and local officials.

The company outlines that currently more than 1.2 MMbbld of oil are being produced in the Bakken. Over 95% of it is being shipped at greater expense to refineries hundreds of miles away on the East, West, and Gulf coasts because there is only 94,000 bbld of refining capacity available in North Dakota. Locating the refinery in the Bakken will ensure a steady supply of below-market crude oil feedstock from production companies seeking transportation savings and a local market for refined fuels.

Further, a byproduct of the rapid growth of the Bakken oi l play has been the coproduction of a significant amount of natural gas. About one-third is currently being flared, vented, or is no-bid and is available to Meridian at a cost well below hub prices paid by competing refineries. Also, the use of natural gas to operate the refinery will allow 100% of the crude intake to be processed without a parasitic effect. The plant will have emissions so low itwon’t require an Environmental Protection Agency permit.

(SOURCE: The Weekly Propane Newsletter, July 2, 2018)