William Prentice, Meridian Energy
According to William Prentice, chairman and CEO of Meridian Energy Group Inc., the company’s new Davis Refinery in North Dakota will be one of the most modern, efficient and environmentally compliant refineries that has come along in more than 50 years. Meridian recently submitted its first round of permit applications relating to its 55,000-barrel-per-day Davis Refinery. The Davis site is located near Belfield in Billings County, North Dakota, in the heart of the Bakken play.
“The Davis Refinery will process crude oil, and it will refine that oil into a full slate of liquid fuels and specialty chemicals, including a substantial amount of gasoline, kerosene (jet fuel) and diesel,” Prentice explained. “The exact quantities of each product will depend upon a number of things, including the mix or blend of crude oils that are used as the feedstock for the refinery and other issues that are currently the subject of the ongoing design of the refinery.”
Prentice, who leads Meridian and is overseeing the progress of the Davis Refinery, has 37 years of experience in energy project development, finance, design-construction and operations, and in new venture formations in the energy and technology industries. He holds a master’s degree from University of California, Irvine and two bachelor’s degrees in engineering from Arizona State University.
Deciding on location
The Davis Refinery acquired its location because Tom Williams, one of the co-founders of Meridian, and his extended family originate from Western North Dakota. Williams conceived the idea of the Davis Refinery when he went to North Dakota on behalf of his family to investigate a situation in connection with mineral rights on property still owned by the Davis family. He saw the extent of oil and gas investment in the area but noticed refining capacity seemed limited in relation to the pace of oil production.
Williams identified a number of site locations that were of interest because of their proximities to crude supplies and to road, rail and pipeline transportation assets. The site Meridian settled on had the best configuration with respect to the neighboring rail system and for the refinery process units themselves.
“Geography is a significant factor in the value of the Bakken crude resource,” Prentice said. “By locating a well-designed refinery in this area, Meridian is providing the local crude producers, regional refined product distributors and consumers with greater competitive choices.”
According to Meridian, only 94,000 barrels per day of refining capacity exists in North Dakota: the 74,000-barrel-per-day Tesoro Refinery in Mandan and the 20,000-barrel-per-day Prairie Refinery in Dickinson. The rest of the crude oil produced in the Bakken has to be shipped out of North Dakota to distant refineries.
A greenfield refinery
The Davis Refinery will be only the second greenfield refinery built in the U.S. since 1976. A greenfield plant is a brand new facility, as opposed to a facility that requires an addition or a modification to an existing facility. In other words, when construction starts, it is on a “green field.”
“As a brand new plant, the Davis Refinery will not be burdened with outdated legacy operating units, will operate more cleanly and efficiently, will utilize state-of-the-art instrumentation and control technology, and will fully comply with modern environmental and safety requirements,” Prentice said.
Building the refinery
The Davis Refinery will be built in two phases. The initial phase of 27,500 barrels per day, which Meridian is calling “Davis Light,” will focus primarily on diesel, jet fuel and distillate products for local markets. The full Davis capacity of 55,000 barrels per day, which will lag start-up of Davis Light by about 12 to 18 months, will produce a full slate of refined products for wider regional markets. Meridian expects mechanical completion of the refinery will be achieved within two years of commencing construction.
“Meridian will be filing other permit applications, including its air quality permit to construct application with the State of North Dakota’s Health Department,” Prentice said. “The permitting process will determine the schedule for the Davis Refinery over the next several months. Once permits have been obtained, the Davis Refinery will have to cope with the myriad of issues that all complex capital projects must deal with, including labor supply, materials, fabrication of machinery, installation and overall project management. These issues, in this case, will be complicated by the potential for weather-related delays during winter. Then start-up is always a challenge for a plant such as this.
“Meridian regards all of these challenges as manageable, and in fact these items are what make this an interesting business to be in.”
The Davis Refinery will initially accept crude oil shipments by truck, rail and pipeline but will gradually migrate the vast majority of its crude shipments to pipeline gathering systems, which are safer and more cost effective.
Outside support, assistance
Meridian is now a member of the North Dakota Petroleum Council, and it will be increasingly active in that organization. The company is also working with both the North Dakota Department of Mineral Resources and Bismarck State College National Energy Center of Excellence to further its involvement in the community.
“Our involvement with the local community has been initiated by our recent permit applications and will accelerate as that process runs its course,” Prentice said. “Meridian will have more and more people working at the site and moving into the local community over the next few months where they will be making their homes with their families.”
Meridian’s leaders are also aware there are many highly qualified firms and people in the area, and they intend to maximize the amount of local hiring and subcontracting.
“We’ve set up a link on our website for people and firms that want to be involved,” Prentice said. “Meridian will contact them as their services are needed.”
Construction of the refinery may require as many as 500 people, with that number peaking sometime during 2017. Permanent employment at the Davis Refinery will be approximately 225 to 250 people.
“We are very impressed with the business climate in North Dakota and grateful for the reception that we have enjoyed to date,” Prentice said. “We are eager to become an active and permanent member of the energy industry in Western North Dakota and of the state’s business community in general.”
For more information, visit www.meridianenergygroupinc.com or call (877) 542-5213.
Meridian Energy Group Inc.’s Davis Refinery in North Dakota will address two pressing needs:
1. The demand for local refining capacity. The Davis Refinery will expand refining capacity near the production areas of the more than 1 million barrels per day of crude oil currently being produced in the Bakken region. Most of this crude oil is currently being transported out of North Dakota for refining at higher costs.
2. The supply of fuel for the regional and local markets. The refinery will turn locally produced crude into super-clean transportation and heating fuels — providing a supply to the oil service, agriculture and trucking industries, as well as consumer automobiles — which are currently being shipped into North Dakota also at higher costs.
