Crestwood Equity Partners LP said it has started commissioning activities for the first phase of a natural gas processing plant in North Dakota, and has reached a final investment decision (FID) for a second phase expansion.

On Wednesday, Houston-based Crestwood said commissioning had begun for Phase 1 at its Bear Den processing plant in Watford City, ND. The plant would add 30 MMcf/d of processing capacity and support increasing natural gas volumes on its Arrow gathering system, which is on the Fort Berthold Indian Reservation.

Meanwhile, the FID means Crestwood would move forward with a Phase 2 expansion at Bear Den, with the addition of a 120 MMcf/d cryogenic gas processing plant.

Crestwood said once Phase 1 at Bear Den is in service, the company “will substantially alleviate current curtailments from its third-party processor as well as current flared gas volumes.” It expects the plant to operate at full utilization by year’s end.

“The Arrow system will be Crestwood’s largest growth driver in 2018 as our producers continue to invest in the Bakken due to very strong well-economics, increasing estimated ultimate recoveries and a large inventory of well locations,” said Robert Phillips, CEO of Crestwood’s general partner. He added that Phase 1 at Bear Den would “give our producers enhanced flow assurance, more reliable service and improved net backs.

“We are investing in the Phase 2 expansion as our producer customers continue to aggressively develop their acreage on the Arrow system.”

Crestwood described Phase 2 as “a long-term processing solution that will be scaled to handle 100% of the processing requirements for producers on the Arrow system,” particularly once third-party processing contracts expire in 3Q2019. The company expects to invest about $185 million on the Phase 2 expansion, with a targeted in-service date in 2Q2019.

Upon completion of the Phase 2 expansion, Crestwood would have a combined 150 MMcf/d of gas processing capacity in the Bakken Shale. Bear Den is supported by 150,000 acres dedicated to long-term contracts with Crestwood’s multiple Arrow producers. Under the contracts, the company purchases 100% of oil and natural gas volumes at the wellhead, giving Crestwood full control of processing volumes.

Last month, Lynn Helms, director of the North Dakota Department of Mineral Resources, predicted that the Bakken would need at least two more natural gas processing plants built within the next two years in order to meet the state’s goal of capturing 88% of flared gas by 2019.

In other news, Crestwood said it had closed on the sale of its 100% equity interests of US Salt LLC to an affiliate of Kissner Group Holdings LP for $225 million. The deal is subject to working capital and minor maintenance capital adjustments.

“This transaction is materially accretive to Crestwood’s current business plan as we expect to reinvest the proceeds into our high-growth Bakken and Delaware Basin footprints over the remainder of 2017 and full-year 2018,” Phillips said.