Cerilon officials discuss Trenton plant 11-2-2021

Nico Duursema and Ron Opperman with Cerilon discuss their plans for a GTL plant in Trenton.

Williams County has agreed to provide a letter of intent to provide a $6 million no-interest loan to the $2.8 billion GTL plant locating in Trenton. The loan from Williams County will help Cerilon unlock additional funding opportunities for the plant from North Dakota, which itself has already agreed to loan the Canada-based company $3 million from its Development Fund.

Special Assistant States Attorney Karen Prout said funds will not be disbursed to the company until it has signed binding land purchase agreements for the land, as well as loan agreements with North Dakota.

The money also won’t be paid out all at once, but in regular increments over a 12-month period. Cerilon is to pay the money back once commercial operations begin, or within seven years after the first loan payment is disbursed, whichever comes first.

The Cerilon plant, it was also clarified during public comments, is not the same plant as a biofuels plant also being discussed for the Trenton area. The two projects are different.

Nico Duursema and Ron Opperman with Cerilon were present at the meeting to talk about their project and their qualifications to lead its construction.

The two have more than 25 years of experience in developing gas to liquids plants around the world, and have worked for some of the largest oil companies in the world, Duursema said, listing locations in South Africa, Qatar, and Nigeria.

The plant in Trenton will be taking about 240 million cubic feet of gas per day to convert it into liquids that could include low-sulfur diesel, jet fuel, and naphtha in phase one.

The diesel that the plant produces will be exceptional, Opperman said, with high-energy output. It also won’t contain any aromatics like benzene, he added, which means it will be non-toxic to aquatic systems and is biodegradable within three weeks.

Naptha can be used was a diluent, and the company foresees great demand for the product, which is blended in to produce low-sulfur fuels, eliminating sulfur oxide pollutants.

The location could also produce jet fuel for Minot Airfare base, transporting it via the nearby Cenex pipeline, which Opperman said would add a very strong strategic volume to the product mix. They’re also considering production of high-performance base oils, as well as fertilizer at the plant.

Last, but not least, carbon capture and sequestration are being pursued at the site, and Cerilon said it will engage deep well studies on the geology.

“We believe that the area will be well-suited to accept carbon dioxide in large quantities for decades to come,” he said. “So we intend to do about 2 million metric tones of carbon dioxide per annum that we will capture and we will sequestrate, which reduces our overall carbon footprint of the site.”

That will be enough carbon capture to qualify for federal tax credits, Opperman added.

Commissioner Barry Ramberg asked the company what kind of assurances it can offer that the county will get its money back.

Duursema told commissioners that the company has already lined up “super major” partnerships that will buy 100 percent of all their products with two of the top five energy companies in the world.

“What we have is really a perfect deal in the sense that 100 percent of all our products that we will be producing, they want to buy, and they’ve given us an off take agreement for that,” he said. “They’ve also given us a supply agreement. And then, on top of that, the licensing of the technology is, you know, from a partnership of two of the top five majors in the world.”

The due diligence on these partnerships has all been supplied to North Dakota, he added, which required that to authorize its $3 million loan to Cerilon. However, that due diligence was not as thorough even as what it went through with its “supermajor” partners, Duursema added.

“It took us nine months to go through this process,” he said. “And you know in doing so, it affected everything that we’re doing. How we’re doing it, what our approach is, you know the types of synergies.”

Significant intelligence has also been done on himself and Opperman as part of that due diligence, Duursema added.

“We don’t mind that because we’ve done a few of these projects,” he said. “This is not the first rodeo.”

Williams County Commission Chairman Steve Kemp, meanwhile, acknowledged there’s no guarantee the county will get its money back, but he feels the chances are high and he feels good about the project.

“We believe that it should be successful with the contracts on the off take agreements,” Kemps said. “Basically that’s as good as money in the bank as far as development is concerned. But, no, there really are no guarantees on anything, and we have to be prepared that this money could evaporate. That’s one of the (possible) outcomes. But I believe in my heart that this project will be successful and we will get that money back.”

Kemp added that the source of the funding will be focused around gross production tax dollars, so the project is funded by money that originated with the industry. Construction of the plant is expected to take around five years, with about half devoted to engineering and pre-development.

Commissioner Beau Anderson wanted to know if county commissioners would be made privy to the financial statements and due diligence the company has done to date.

Duursema confirmed they would once a nondisclosure agreement is signed and added there are two key reasons they have requested the $6 million loan from Williams County.

First, it shows a commitment from the county into the partnership that is building the plant. Secondly, and perhaps more importantly, it is also unlocking additional development funds for optimizing the economics of the project for shareholders.

“And that was one of the key criteria, why we’ve selected North Dakota versus developing an agreement instead for Oklahoma or Louisiana,” he said. “That was a key differentiating factor. So I maybe just want to provide that context.”

Duursema added that the company will build the GTL plant somewhere, and, if it doesn’t happen at Trenton, then the company will already be out a lot of money. In that case, though, they will still need some other location to build the plant.

“We will do this,” he said. “It’s going to be which location we’re going to do it. But I do understand that it is a leap of faith. Thank you for the trust that you’ve entrusted so far.”

Commissioner David Montgomery said he believed the impact of the project will be huge as he made the motion to approve the loan to Cerilon. The plant will employ about 1,000 construction workers to build, and then 80 full-time permanent employees.

“Moving forward, I think it’s important that this board, and we’ll be very, very, very transparent to not only ourselves, but to the public,” he added.

Anderson seconded the motion.

“I’m excited for the community down there,” he said. “The one, my biggest concern is making sure that we as the county work towards taking care of the folks that are going to be impacted by all of the development.”

The county has already asked the Department of Transportation about the Marly crossing on 1804, Anderson added. The county commissioners also realize solutions will be needed for the street closest to Trenton as well, which is a township road.

“I’ve also thought that in the best interest of Trenton, we’re probably going to have to discuss some sort of reliever route for traffic,” he added. “I mean if there’s going to be lots of development, we’re going to have to do something.”

Anderson added he is committed to personal time spent going to Bismarck to help ensure that happens.

Williams County, in fact, has already sent a letter to the governor’s office, local legislators, and local Department of Transportation offices about that.

Duursema pointed out there will be at least two years to prepare the community for the development and said they will work with both the community and the county commission on how best to do that.

“We really want to make sure that we, you know, we did this in a sustained fashion,” he said. “And if there’s any support that we can provide, you know, with the governor and Commissioner of commerce and other people, you know, we’re more than willing to put that on the table as well and support it.”

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