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FERC Waiver Allows Alliance to Take Bakken Gas

FERC approved a revision to the Alliance Pipeline LP tariff allowing the pipeline to waive a gas quality specification on a first come, first served basis. This will allow Alliance to receive gas produced in association with oil production from Bakken play wells.

The waiver will enable Pecan Pipeline (North Dakota) Inc., a subsidiary of EOG Resources Inc. (EOG), to flow dense phase rich gas outside the liquefiable hydrocarbon specification currently contained in Alliance's Federal Energy Regulatory Commission (FERC) tariff. Pecan North Dakota gas receipts will not have an operational impact on the Alliance system as this gas will be blended with larger quantities entering from Canada, and the combined gas stream delivered to the Chicago market will remain within Alliance's FERC Tariff gas quality specifications, Alliance said.

"The FERC's decision shows a strong commitment to swiftly and effectively develop North Dakota's natural gas resources by utilizing existing infrastructure," said Alliance CEO Murray Birch.

"Pecan North Dakota's planned Prairie Rose Pipeline is indicative of EOG's commitment to the development of the Bakken oil play in the region. We appreciate the support of the FERC, the State of North Dakota and other entities in helping to advance this important project," said Ray Ingle, president of Pecan North Dakota.

The Alliance system runs through the middle of the Williston Basin and can transport gas liquids, thereby reducing the need for producers to build plants to process gas before transporting to market.

The Pecan North Dakota Transportation Agreement has an initial term of 10-years with options for renewal. A new interconnection near Towner, ND, is scheduled to be on-line in mid 2009.

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