Bismarck, ND-based MDU Resources Group has placed on hold its plans for building a major natural gas pipeline to carry associated gas supplies from the Bakken oil boom. Dakota Pipeline is slated to be a $650 million project and had been aimed at a late 2017 start-up date.
However, a North Dakota-based MDU spokesperson told NGI's Shale Daily on Friday that the pause should not be construed as the diversified utility holding company giving up on the project. "It is still very much alive," he said.
A unit of MDU, WBI Energy Inc., has two pending pipeline projects tied to the Bakken oil/gas boom -- the other is a 96-mile, 20-inch diameter pipeline that would transfer supplies from Northern Border Pipeline's major interstate line near Zeeland, ND, through four counties (Mcintosh, Logan, LaMoure and Stutsman) to the proposed fertilizer plant being planned by a Minnesota-based agricultural cooperative, CHS Inc. (see Shale Daily, Aug. 29).
CHS has obtained its board's approval to proceed with the fertilizer plant, and MDU plans to file with the Federal Energy Regulatory Commission in February for approval to build the pipeline, which has been expanded in size from 16- to 20-diameter, the spokesperson said.
In August, during a 2Q2014 earnings conference call, WBI officials said they were making progress on both projects, each dependent on unrelated market developments to serve the Williston Basin and Bakken/Three Forks shale production.
The Dakota Pipeline project is the largest capital undertaking in MDU's 90-year history -- a proposed 375-mile pipeline, for which a 120-day open season concluded earlier this year. Lining up sufficient firm transport deals with producers and end-users is the sticking point, but not for a lack of trying, according to the MDU spokesperson.
"We continue to actively pursue contracts," said the spokesperson, outlining continuing plans for the 400 MMcf/d capacity, 24-inch diameter transmission pipeline. The current plunge in global oil prices is not a factor regarding this project or the decision to delay it, he said.
"The Bakken is still producing oil and natural gas and will continue to do so; they'll be gas available to stream through this pipeline," the spokesperson said.
"We're still working this [Dakota Pipeline] project, and we're working it hard. Don't think we have put it on the back shelf. It is still an active project."