Construction of oil refinery to begin in 2022 near North Dakota’s only national park, CEO says

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The proposed Davis refinery, in financial difficulty, has experienced multiple delays since state environmental regulators allowed Houston, Texas-based Meridian Energy Group to build the facility in 2018. its permit after the lockdown refinery in litigation with environmental groups and, before the second deadline expired on June 12, state regulators gave the project an additional 90 days to begin construction or risk losing its license.

This time around, Meridian has met state requirements to begin construction before a revised deadline last Sunday, allowing the company to keep its license active.

In a late August letter, Meridian CEO William Prentice informed the Department of Environmental Quality that his company had entered into a binding contract with McDermott, an engineering firm also based in Houston, for the construction. crude oil processing units. Prentice said in the letter that terminating the contract with McDermott would result in a substantial forfeiture of money amounting to around 10% of the total cost of the project, which the company has estimated at more than $ 1 billion.

Environmental Quality Department environmental engineer David Stroh said that with this contractual commitment, Meridian has achieved the “Go ‘pass” benchmark for its project and can retain its building permit. After this step, Meridian is no longer faced with an official deadline, Stroh said, but the Environmental Quality Department will organize routine checks with the company to ensure the project is moving forward.

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In a statement to the Forum, Prentice called the Environmental Quality Department’s decision an important milestone for the project. He acknowledged the delays in recent years, but said Meridian had made “steady and orderly progress” on the refinery.

Next steps at the Davis Refinery will include design work, purchase and manufacture of installation modules, which Prentice says will take place off-site. As a result, residents of western North Dakota shouldn’t expect to see development of the refinery site three miles east of the southern unit of Theodore Roosevelt National Park until next year. , when the company announced that foundation work would begin.

Since its original proposal, the Meridian Project has been a flashpoint for environmental groups opposed to building a refinery so close to North Dakota’s only national park. Opponents of the project have frequently raised Meridian’s track record of delays, unpaid invoices and lawsuits – including one brought by former employees in a Texas court alleging the company failed to pay them wages and bonuses – to question the viability of the project.

To keep its license, Meridian had to either start physical construction before the deadline or prove that it had entered into a major construction contract. Aside from some preliminary earthwork, the proposed refinery site has remained largely intact since the project was first licensed.

Stroh noted that concerns about the financial well-being of Meridian fall outside the purview of the Ministry of Environmental Quality.

“We’re not really making a subjective decision here,” he said. “They have shown that they obey the law. (Now) they must continue to maintain progress.”

Stroh said that while Meridian does not face impending construction deadlines, the company is expected to complete the project “within a reasonable time.” Stroh said he would expect a refinery of this magnitude to take at least three years.

Because licensing new refineries can be very stringent, the oil industry has traditionally relied on updates and extensions to existing facilities across the country. Davis would be the first new refinery built in the United States since 1977 and would process 49,500 barrels of Bakken oil per day.

Prentice said his company would use the technological advances of recent decades to build “the cleanest refinery in the world.”

Readers can contact Forum reporter Adam Willis, a member of the Report for America corps, at [email protected].


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