Bismarck, N.D., Belfield, N.D 鈥� A new oil refinery at Belfield, N.D. has cleared its last regulatory hurdle and construction is expected to start very soon.
On June 13, , announced that the North Dakota Department of Health (NDDoH) air quality division has issued the permit to construct聽(PTC)聽for the Davis Refinery at Belfield. The issuance of the PTC by the NDDoH comes 18 months after the initial application was filed by Meridian and is based on a thorough review of the Davis Refinery application documents, and a full three-month review of comments received during a 45-day public comment period.
This marks the first time that a full-conversion refinery of this size and complexity has been reviewed and approved as a 鈥渟ynthetic minor source.鈥� Meridian said in a release that securing this classification reflects its innovative design, and dedication to attain the lowest achievable emission rates ever seen in a full-conversion oil refinery. Now that the final PTC has been issued, Meridian will proceed with detailed design, engineering, procurement and construction of the Davis Refinery.
A Meridian spokesperson told Pipeline News on June 22 that 鈥淢eridian will look to break ground on the Davis Refinery in the next two weeks.鈥�
鈥淲e fully appreciate the thorough and meticulous review performed by the NDDoH, which held us accountable at every phase of the review process,鈥� said Meridian CEO William Prentice. 鈥淢eridian鈥檚 design efforts, which included modifications and improvements made as a result of their rigorous review, have ensured that the Davis Refinery will operate in full compliance with the law, and in a manner that is responsive to the concerns of the local community. The Davis Refinery will indeed be the cleanest refinery on the planet when completed.鈥�
Prentice then added, 鈥淧ublication of this final permit validates the enormous amount of work performed by the entire team and the Davis PTC also represents the culmination of the tireless efforts of the NDDoH staff. Meridian and its team utilized the current limits of technical innovation throughout this process, and never stopped seeking opportunities to make the Davis Refinery as clean as it could possibly be. We hope Davis becomes the new blueprint for all refinery projects that follow it.鈥�
On May 22 at the Williston Basin Petroleum Conference in Bismarck, N.D., Lance Medlin, executive vice president, projects, with Meridian, gave a presentation on the project. After that presentation, he spoke at length with Pipeline News about their plans.
Phase 1 will be under half a billion dollars, and a similar amount is expected for Phase 2, according to Medlin. The initial phase will be a 27,500 barrels per day (bpd) hydro-skimming plant, with full commercial operation in early 2020. It will produce finished gasoline, kerosene/jet-A, ultra low sulfur diesel and low sulfur fuel oil (ATBs).
The planned expansion will bring that number up to 49,500 bpd.
The site is southwest of Belfield, immediately adjacent to the BNSF Railway Fryburg rail terminal.
He expects there will be about 1,000 workers in the construction phase. It will take 18 months from scratching dirt to completion. Asked how they will do it so quickly, he said, 鈥淭rade secrets,鈥� but added that it will all be U.S.-sourced. 鈥淎nything not built in the U.S. will be by exception, by either licensed exception. I don鈥檛 have any intention, and it is my call, of shipping any work outside of the U.S.鈥�
鈥淲e鈥檝e got plenty of fabrication capability in the U.S., and it is tremendously underused right now. Even though we are coming out of our downturn, we are still in a downturn,鈥� Medlin said.
鈥淭he majority of the facility will be modularly constructed. You鈥檝e got to understand that a lot of the cost and schedule impacts affecting other facilities here were due to a stick-built design, and you鈥檝e got the schedule impact of just the natural winter in this region. So modular fabrication, with onsite erection of modules, is the way to get it built within 18 months.鈥�
He mentioned that there is a lot of fabrication capacity in Texas and Colorado, but also in Canada. 鈥淲e鈥檙e talking about a lot of modules. A lot,鈥� he emphasized. 鈥淪o we鈥檝e just taken the model and gone through it and modulized the design. It鈥檚 a lot of modules. It鈥檚 way too many for one yard. It鈥檚 way too much risk for one company to build all the modules. It has to be spread out.鈥�
That will be up to the EPC firm for sourcing those modules.
With the air quality permit now in place, all the permitting is now in place. The land is all secured.
Asked in May how many people they had working for them, he responded, 鈥淗ow many people, or how many companies? We have six major contracts with major companies, burning manhours right now. We have a multimillion dollar contract burning manhours with our EPC (engineering, procurement and construction) contractor, who has already been selected and not announced. We are negotiating our EPC cost, as they are finalizing our feed.鈥�
In May there were probably 200 people working on the project, principally engineers, project control, supply chain and procurement. In their early stages, they had 30 people on board, including contractors, in the U.S., but there were probably another 50 people in Venezuela working on drafting.
The company is raring to go. Asked how long it would take to get working once the permit was in place, Medlin enthusiastically said, 鈥淚f it happens on a Saturday, it might take us until Monday. We鈥檙e ready. We鈥檝e got yellow iron on standby. We have all of our contracts ready. We have LOIs (letters of intent) issued, MOUs (memorandum of understanding). If I can get the permit on a Friday, I can have surveyors and yellow iron on site 24 hours later. And I will.鈥�
At this point, the company is backed by private equity.
Regarding the implantation of Phase 2, Medlin said, 鈥淭here is no desire to wait between the completion of Phase 1 and the start of Phase 2. There鈥檚 no commercial desire. We want the revenue. And there鈥檚 no permitting reason to wait. We鈥檙e permitted for the entirety of the facility.鈥�
They鈥檙e not looking at a refinery in Canada, but they are in the U.S. 鈥淲e are going through the regulatory process for our next refinery,鈥� he said, but he can鈥檛 say where.
