Natural gas infrastructure in the Bakken Shale is being added at the fastest rate ever, but associated gas flaring at the wellhead stubbornly remains due to a complex set of challenges, according to a report released Wednesday by the North Dakota Pipeline Authority.
Even with the continuing high flaring percentages, the amount of economic value lost due to burning stranded gas has stayed relatively low because the Bakken is primarily is an oil-producing region with a lot of associated gas and large amounts of valuable liquids, the report said.
In the report, titled "A Detailed Look at Natural Gas Gathering," the state agency cited various challenges to reducing flaring from its current levels near 30%. Challenges include growing production, the relatively young age of the development, harsh winter conditions in the oilfields, and the fact that long-term potential in the Williston Basin is still being explored. The flaring has drawn legal action (see Shale Daily,Oct. 18).
The report offers the positive news that the rate of connecting new wells is exceeding the pace of drilling new wells, but it also points out that this does not mean that the percentage of gas being flared will drop rapidly because of a combination of complex factors.
Nevertheless, "sustaining or exceeding the current gas gathering pace is vital for the purpose of reducing the backlog of wells that have been flaring for a long period of time," said the report, while pointing out that simply connecting more wells "may not completely extinguish the flare if the pipeline system cannot handle all of the new production."
While there continues to be a combination of flared gas from both connected and unconnected wells, and the number of connected wells continues to grow, flaring from wells with gathering pipeline connections will continue to grow.
The report said that enhancing existing gathering infrastructure with more compression, looping and other measures, along with adding to the state's existing 20 gas processing/conditioning plants is needed. The existing plants have the collective capability to process roughly 1 Bcf/d, and six new or expanded plants are expected to add 450 MMcf/d in the next several years, according to the report, which was released by Justin Kringstad, the pipeline authority director.
Helpful additional factors longer term should include beefing up interstate takeaway capacity on the three existing pipelines (WBI Transmission, Northern Border and Alliance) serving the state or building a new pipeline, along with various well site alternatives to flaring being applied (electric generation, fertilizer production, trucking fuel use, liquefaction production, and small-scale processing).
The report calls out the common misconception that low natural gas prices are causing the high levels of flaring. "In actuality, the value of Bakken natural gas, including the natural gas liquids (NGL), makes it very economically attractive to construct the required infrastructure to capture the resource."
Bakken gas is very rich in NGLs, according to the report. It cites the calculation that for each 1 Mcf of raw natural gas there are eight to 12 gallons of NGLs (ethane, propane, butane and natural gasoline) with a current market value of about $6.50-8/Mcf.
Similarly, the report cites a "holistic view of petroleum production and flaring" in North Dakota showing that only 2.7% of the resource's total economic value and 7.2% of the energy content in current oil/gas production is being lost due to flaring. "While the percentages are low, there is still a tremendous amount of value in the flared natural gas, thus the high level of investment and gathering activity seen in this report."