Alliance Pipeline LP said Hess Corp. has contracted for capacity on a North Dakota pipeline lateral and associated facilities it plans to construct to carry liquids-rich gas from the Williston Basin.

Hess entered into a precedent agreement with Alliance for service on the proposed 80-mile lateral, which would connect production from Hess’ gas processing facility in Tioga, ND, to the Alliance mainline near Sherwood, ND, for shipment to the Chicago market hub.

The pipeline’s initial design capacity is 120 MMcf/day, which could be expanded based on shipper demand. Alliance said it will hold an open season for the project this summer. The Tioga Lateral Project has a planned in-service date of July 2013, subject to regulatory and other approvals.

“The Alliance system ships high-energy, liquids-rich natural gas to NGL [natural gas liquids] processing facilities owned by Aux Sable Liquid Products at the terminus of the mainline system near Chicago,” said Alliance CEO Murray Birch.

Earlier this month Aux Sable unit Sable NGL LLC said it was buying the Stanley Condensate Recovery Plant and Prairie Rose Pipeline from a unit of EOG Resources Inc. Prairie Rose connects the Stanley plant to Alliance Pipeline (see Shale Daily, June 7).

At the end of last year Hess became the second largest acreage holder within the liquids-rich Bakken Shale when it completed the acquisition of 167,000 net acres in the region from TRZ Energy LLC for $1.05 billion (see Shale Daily, Dec. 30, 2010).

Also expanding liquids-rich handling capabilities in the Williston Basin is Oneok Partners LP, which last year launched plans to build the Bakken Pipeline, an NGL pipe that would be 525-615 miles long and would transport unfractionated NGLs from the basin to the Overland Pass Pipeline, a 760-mile NGL pipe that extends from southern Wyoming to Conway, KS (see Daily GPI, July 27, 2010).

A boom if activity has occurred over the last year in the Bakken/Sanish/Three Forks play, according to NGI’s Shale Daily Unconventional Rig Count. Drilling for oil and gas in the play increased 42% to 173 rigs as of the week ending June 17 compared with 122 rigs a year ago. That 51-rig increase was second only to the Eagle Ford Shale, which increased to 194 rigs from 86 rigs last year.