Confusion About Proposed “Davis Refinery” West Of Belfield, North Dakota

I had some confusion about the proposed “Davis Refinery” west of Belfield, North Dakota.  I spent several hours trying to find more information.  Here is what I found:

  1.   According to S&P Global Market Intelligence, a division of S&P Global: “Meridian Energy Group was founded in 2012 and is headquartered in Irvine, California.”  I also found on the the website gust.com, that Meridian Energy Group was founded in 2012, and was based in Irvine, California.  (Meridian Energy Group is the owner/developer of the proposed “Davis Refinery”.)
  2.  According to the website Bizapedia: “Davis Family Partners LLP is a North Dakota LLP filed on February 26, 2013….The company’s principal address is 18493 Ray Ridge Dr, Lake Oswego, OR 97034-7531….The company has 1 principal on record. The principal is Richard Palaniuk from Irvine CA.”  (Davis Family Partners LLP is said to be the largest shareholder in Meridian Energy Group.)
  3. In a July 14, 2016 press release on the Meridian Energy Group website: “The largest shareholder of Meridian is the Davis Family Partners, which was formed to handle property asset acquisition and mineral rights arising from the family’s original farming operation in Emmons County, North Dakota.”
  4. In a July 14, 2016 press release on the Meridian Energy Group website:  “Tom Williams, Meridian’s EVP of Planning and Permitting, and who sits on the Meridian Board of Directors….Mr. Williams and his cousin, Richard Palaniuk, are the current managing partners of Davis Family Partners.”
  5. In a July 14, 2016 press release on the Meridian Energy Group website: “William Prentice, Meridian’s CEO added, “Meridian was actually founded by the Davis Family Partners when Mr. Williams and Mr. Palaniuk, whose family originated in Billings and Stark Counties, were back in North Dakota on family business….Tom and Richard identified and optioned the Davis Refinery site at the time.””
  6. Performing a Google search I found:  https://www.meridianenergygroupinc.com/wp-content/…/2015/…/Meridian-Summary:  Executive Summary of the Meridian Group, Inc., Confidential Private Placement Offering Memorandum, dated May 4, 2015, where it is stated: “Meridian Energy Group, Inc. (“Meridian” or the “Company”) is a recently formed South Dakota corporation that will build and operate a crude oil refinery on a 600 acre site near Belfield, N.D., in the heart of the Bakken.  The proceeds from this Offering will provide Meridian with the working capital to acquire the necessary permits, secure project financing and perform all pre-construction activities to bring the project to “shovel ready” status.”
  7. The Dickinson Press newspaper article dated December 30, 2015, titled New Refinery Proposed In Billings County: “Billings County may soon see another diesel fuel refinery rise. California-based Meridian Energy Group Inc. is looking to build a refinery on 620 acres of land west of Belfield. It would refine crude oil produced in the Bakken.”
  8. Lauren Donovan of the Bismarck Tribune newspaper wrote an article dated January 27, 2016, titled Planned Billings County diesel refinery still needs a zoning permit:  “Meridian Energy Group Inc. says it plans to start preliminary work on a 55,000-barrel diesel refinery project between Fryburg and Belfield in that time, but so far has not made a zoning application, says deputy zoning inspector Juliana Pemberton.  Meridian’s vice president of business development, Fred Bloom, said it’s possible zoning could be accomplished within two weeks and the company could start site prep for fabrication facilities that will be used for building the refinery components….Bloom said the plan is to finalize engineering plans, begin construction on the refinery this summer and be selling diesel within two years.”
  9. Lauren Donovan of the Bismarck Tribune newspaper wrote an article dated April 5, 2016, about the difficulty in the proposed refinery getting an air quality permit:  “That proximity to Theodore Roosevelt National Park at Medora — less than 3 miles as the crow flies — is guaranteed to make the acquisition of an air quality permit a difficult process, says Craig Thorstenson, environmental engineer with the North Dakota Health Department’s air quality division….The park — home to buttes and buffalo — has a Class I air quality standard. Any new source of nitrogen dioxide, sulfur dioxide and particulate will face a federal standard to prevent significant air quality deterioration that’s far more stringent than for all other air, Thorstenson said….He said it will take as long as a year to run computer models that factor in existing pollution, new pollution from the refinery and wind and weather data.”
  10. In a July 6, 2016 press release on the Meridian Energy Group Website: “Meridian Energy Group, Inc. announced today that it received unanimous approval from the Billings County Board of County Commissioners on the Zoning Certificate and Conditional Use Permit for its proposed Davis Refinery.”
  11. If you go to the North Dakota Department of Health Air Quality website, their website states that they will review air quality permit applications in the order which they are received.  The website shows what air quality permit applications they are working on, when each of these applications was received, and the review status of each.  The website shows that the Meridian Energy Group “Davis Refinery” air quality permit application was received on 10/17/2016, but they state that this application is so complex, it could take up to one year to complete the review processes, and, as of today 2/24/2017, the status is “received” it does not show it as “under review”, they aren’t even reviewing it yet.  What this means is, if they started the air quality permit application review process today, it could take until 2/24/2018 to determine if they will issue a permit.

 

In the above timeline, I tried to list the key facts about the Meridian Energy Group proposed “Davis Refinery”, and provide documentation of where I got these facts.  There are a few more things that I want to cover.

Local people in the Dickinson, Belfield, and Medora area have asked the questions, has the Meridian Energy Group ever built a refinery before, and who are their investors?  The Meridian Energy Group was formed in 2012, and the Meridian Energy Group has not built a refinery before.  The Meridian Energy Group has stated that their main investor is the Davis Family Partners.

If you look up Meridian Energy, you might see that it is an electric company based in New Zealand that was founded in 1999, but this is not the Meridian Energy Group of Irvine, California.  If you looked up the Davis Family Partners or Partnership, you would see one in Austin, Delray Beach, Little Rock, Tampa, and Tuscaloosa, but these are not the Davis Family Partners LLP of North Dakota filed in 2013.

It is reported that the Dakota Prairie Refinery that was completed in 2015 on the west side of Dickinson cost $430 million to construct.  The Dakota Prairie Refinery was a joint venture between MDU Montana Dakota Utilities, WBI Energy, and Calumet Specialty Products.  The market capitalization or net worth of MDU is $5.28 billion.  The market capitalization or net worth of Calumet Specialty Products is $312 million.  After the newly completed Dakota Prairie Refinery had approximately $7 million in losses in every quarter for the first year of its operation, MDU-WBI-Calumet sold the refinery to Tesoro in June of 2016.

The Meridian Energy Group proposed “Davis Refinery” is projected to cost $900 million to construct.  The city of Belfield is eager to see the “Davis Refinery” constructed because it is expected to create 500 direct jobs during construction, and create 200 full time direct jobs to operate the refinery after it is completed.

On the Meridian Energy Group website, there is a tab for “Meridian Properties”.  If you  click on this tab, you can read the following: “Meridian is a co-founder of Meridian Properties Corporation. We will develop important industrial, commercial and residential properties on land adjacent to the Davis Refinery site…. Meridian will provide developed sites for over 1,000 residential units, ancillary commercial services such as restaurants and theaters, educational and acute care space, water and sewage treatment facilities, commercial, retail and industrial space as well as a new police and fire facility. The development will include two hotels that will house workers during refinery construction…”

I could not believe the above information.  Dickinson is about a 20 minute drive from Belfield.  Right now in Dickinson, there are approximately 1,000 newly completed apartment units that are at about 50% occupancy.  There are at least 500 new apartments that are unoccupied, not to mention the old apartments, manufactured homes, and rental homes available.

Dickinson has about twelve newly completed hotels and extended stay hotels.  Including the old hotels, Dickinson has a total of approximately 2,000 hotel rooms.  The occupancy rates of the hotels in Dickinson at this time is probably 20%.  There are at least 1,600 hotel rooms available in Dickinson.

I would not build any more residences or hotels at this time in this area.

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2 thoughts on “Confusion About Proposed “Davis Refinery” West Of Belfield, North Dakota

  1. I found your investigation of the Davis refinery to be quite thorough. Thank you for sourcing your research. I was unable to follow the link to the private placement memorandum. Are you able to share it?

    Will you continue to investigate this matter and provide updates?

    Like

    1. I originally wrote my blog post “Confusion About Proposed Davis Refinery” because I was disgusted and annoyed that most North Dakotans assumed that with names like “Meridian Energy” and “Davis Family Partners”, that these people had their own $900 million, without understanding how much money this is.

      I kept looking, and looking, and I was lucky, I stumbled upon one of the first invitations to invest in Meridian, for the purpose of raising money to cover initial pre-construction costs, such as permitting. How this initial invitation got onto the internet, I don’t know, it probably should not have been posted, and it wouldn’t surprise me if the link that I gave for it no longer works. It kind of “let the cat out of the bag” that they didn’t have their own $900 million to pay for the project.

      I think that what I wrote served its purpose, to get people to look into everything, to try to find out about things that were bothering them. One of the North Dakotans that assured me that these people had more money than I could imagine, once I found out that they were trying to raise money to cover the cost of permitting, he began trying to figure out and ask people how in the world were they going to get the tremendous amount of water that they would need.

      The Bismarck Tribune newspaper and reporters are doing a pretty good job lately of discussing and bringing attention to each step that is taken by Meridian Energy, so that people know what is going on.

      Like

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