Meridian Energy Group Inc., Belfield, ND, entered into memoranda of understanding with local and regional petroleum product distribution firms that have agreed to purchase and distribute as much as 268 million gal/year of refined products from Meridian’s two-phased grassroots 55,000-b/sd high-conversion Davis refinery to be built in the heart of southwestern North Dakota’s Bakken shale region, near Belfield, in Billings County, ND (OGJ Online, Dec. 23, 2015).
The MOUs account for more than 67% of production capacity from the Davis refinery’s first 27,500-b/sd Phase 1 development as well as a portion of output from the completed 55,000-b/sd refinery that, once fully commissioned, will produce more than 800 million gal/year of refined products, Meridian said.
Alongside ongoing negotiations of distribution agreements with other firms in the region, Meridian also is finalizing negotiations of other agreements to support the refinery’s operation, including crude supply and crude-product logistics agreements, the company said.
Further details regarding the MOUs and the distribution firms involved were not disclosed.
Separately, however, Meridian did confirm it has completed a letter of intent with Sequent Energy Management LP, Houston, a subsidiary of Atlanta-based Southern Co. Gas, to deliver the Davis refinery’s full requirement of natural gas supplies, which Meridian will use to power most operations at the greenfield site.
With purchase and fabrication of long lead items still ongoing, Meridian plans to break ground on the project shortly after receiving approval of its application for a permit to begin construction from the air-quality division of North Dakota’s health department (OGJ Online, Oct. 11, 2016).
While it did not reveal a definitive timetable for the permit’s pending approval, the company said it expects Phase 1 of the refinery, or Davis Light, to be commercially operating in early 2018.
The refinery’s Phase 2 development, which will expand processing capacity to 55,000-b/sd, is slated for startup sometime in 2019 (OGJ Online, Aug. 24, 2016).
Contact Robert Brelsford at [email protected].
