Davis Refinery Site – July 16, 2018
Meridian is building a state-of-the-art crude oil refinery sited on approximately 150 acres (and additional acreage for buffer) in Billings County east of the Fryburg Rail Facility in Belfield, North Dakota – the heart of the Bakken. At a rated capacity of up to 49,500 barrels per day (“bpd”), Davis could produce as much as 800mm gallons per year of refined products from local crude to serve regional markets. With groundbreaking taking place in July 2018, plant completion is expected by 2020. The property is in close proximity to oil and gas pipelines and major transportation highways. 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 terminal.
The local government agencies and permitting authorities have embraced the projects as permanent job creators and a net contributor to the quality of life in the region. Because the permitting and approval processes are straightforward and streamlined, Meridian expects to have the initial plant operational in a little over 2 years from the first plancheck submittals. Meridian is now finalizing plans for an early 2018 groundbreaking. The Davis Refinery will enjoy several competitive advantages, including: the proximity to oil production; the use of low cost natural gas to operate the plant; its strategic location with direct access to major transportation infrastructure; the business friendly climate of North Dakota fostered by state and local officials.
Proximity to oil production:
Currently, more than 1.2 million barrels of oil are being produced in the Bakken every day. Over 95% of it is being shipped at great expense to refineries hundreds of miles away on the east, west and gulf coasts. This is because there is only 94,000 barrels per day of refining capacity available in North Dakota. Locating the refinery in the heart of 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.
As a byproduct of the tremendous growth of the Bakken oil play has been the co-production of a significant amount of natural gas. About 1/3 of this gas 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 gas to operate the plant will allow 100% of the crude intake to be processed without a parasitic effect. The plant will have emissions so low it won’t require an EPA permit.
Access to transportation:
The Burlington Northern Santa Fe main rail line runs through the property and Meridian will construct a petroleum liquids delivery and uploading facility on the property. Belfield, ND is at the intersection of the two main highways in the state, Interstate 94 and State Route 85, facilitating truck transport of fuels to market. Oil and gas pipelines run adjacent to the Davis site, adding yet another means to affect the delivery and export of feedstock and refined goods.
Business Climate in North Dakota:
There is not likely a more business friendly state in the union compared to North Dakota, whose officials have urged Meridian to proceed with its Davis Refinery plans. Our presence is an integral part of the state’s plan to solve three major issues it faces: the creation of permanent jobs, the shortage of diesel fuel and the environmental crisis of the flaring of natural gas. Meridian expects to receive expedited permitting for the plant.
The Davis refinery will be only the second “greenfield” refinery constructed in the U.S. since 1976. As a new, modern plant, the refinery will enjoy 100% new equipment configured in the most efficient manner, with longer operating cycles and higher output as compared with legacy refineries built decades ago.