Billion dollar refinery proposed for Permian Basin
A California company is seeking to build a $1 billion refinery that will make gasoline and diesel near the Permian Basin town of Kermit.A local refinery in the Permian Basin makes sense. Otherwise, the oil would be shipped to refineries on the coast and the fuel would have to be shipped back to the Permian Basin for use by the producers. It is also not surprising that a California company would want to invest in an operation in Texas since that state is pretty hostile to fossil fuel development.
Meridian Energy Group announced plans on Monday that it has partnered with a subsidiary of the Houston energy conglomerate Winkler Companies and is seeking to build a 60,000 barrel per day refinery just north of the West Texas town.
Although the project is the engineering and design phase, Meridian Energy CEO William Prentice told the Houston Chronicle that the company's Houston office already has options on two properties off State Highway 18 just north of Kermit and plans to file a permit application with the Texas Commission on Environmental Quality within four months.
With the increase of 18-wheelers and other vehicles on the roads of the Permian Basin, Prentice said the refinery will take advantage of locally produced crude oil and sell the gasoline and diesel locally.
"If the refinery were in operation right now, every single barrel would be sold within 100 miles," Prentice said. "There's been such an increase in demand."
Meridian is no stranger to building refineries that process domestically produced light sweet crude.