NGI The Weekly Gas Market Report / NGI All News Access

Alliance Moving Bakken Gas to Chicago Hub

Alliance Pipeline has completed construction of a new interconnect facility near Bantry, ND, connecting its system to Pecan Pipeline's Prairie Rose Pipeline and providing a route for natural gas and natural gas liquids (NGL) to travel from the Bakken Shale to the Chicago hub, the Calgary-based company said.

The interconnect is contracted to move 40 MMcf/d during its first year and will move up to 80 MMcf/d in its second year, an Alliance spokesman told NGI.

The Bantry interconnection is the first field receipt point on the United States side of the Alliance system, which runs directly through the Williston Basin. Alliance, which is jointly owned by Enbridge Inc. and Fort Chicago Energy Partners LP, said it is well positioned to transport additional gas via such interconnections and has the capacity to accept additional gas in the U.S. portion of its system.

"As the lead time to build new infrastructure can be many years, enhancements to an existing transmission system are the most efficient and economical way to transport natural gas from the Bakken to market," said Alliance CEO Murray Birch. "Furthermore, the Alliance Pipeline system transports rich natural gas, which means the NGLs are extracted at the delivery point, rather than at the production source, reducing processing and transportation costs for producers using the Alliance system by avoiding new plant construction."

The announcement came almost 16 months after the Federal Energy Regulatory Commission approved a revision to Alliance's tariff allowing the pipeline to waive a gas quality specification on a first come, first served basis (see NGI, Nov. 4, 2008). The waiver allowed Alliance to receive gas produced in association with oil production from Bakken play wells and enabled Pecan Pipeline, a subsidiary of EOG Resources Inc. (EOG), to flow dense phase rich gas outside the liquefiable hydrocarbon specification previously contained in Alliance's tariff.

Earlier this month Enbridge CEO Patrick Daniel said there "very definitely is going to be a need for rich gas capacity [in the Bakken Shale], and beautifully, Alliance runs right through the Bakken play...I'll leave it at that because we are working on some opportunities right now" (see NGI, Feb. 8). The Alliance system could be expanded, he noted, and "I'm pretty confident it will be the next logical step..."

©Copyright 2010 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

Comments powered by Disqus