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North Dakota PSC Focused on New Pipeline Proposals

Although its pipeline oversight is relatively limited, the North Dakota Public Service Commission (PSC) this month has been focused on several major oil pipeline projects critical to moving Bakken crude to market.

The PSC early in the month flashed a green light for Hess Corp.'s Hawkeye crude oil project, including a 23-mile, 12-inch diameter line and conversion of 2.4 miles of 8-inch gas pipeline. Separately, the three-member regulatory panel held a public hearing on the proposed 15-mile Bridger Pipeline LLC oil line in Billings and Stark Counties, and set another hearing for Thursday on ONEOK Bakken Pipeline LLC's new 4-mile, 8-inch diameter natural gas liquids (NGL) pipeline and associated facilities, part of the Lonesome Creek Pipeline Project (see Shale Daily, Aug. 29, 2014).

Overall, North Dakota's Department of Mineral Resources (DMR), which oversees the bulk of the gas and oil gathering and salt water pipelines in the state, is expecting up to 3,000 miles of pipelines to be installed by the end of 2015, according to DMR Director Lynn Helms.

"Most of the 3,000 miles of new pipeline that is going into the ground this year are going to be Industrial Commission [DMR-regulated] gathering pipelines," said Helms, noting that the PSC only gets involved in the transmission pipes. Jurisdiction between the the PSC and DMR is defined by state statute.

The PSC has jurisdiction over oil infrastructure from the first point after the production well where there is a pump and a tank to store and move the crude, Helms said. "From that point to way downstream, the pipeline and facilities are PSC's jurisdiction," he said.

While the PSC gave the OK for Hess' proposal to add a sixth pipeline crossing Lake Sakakawea, the project has been delayed by lack of a permit from the federal Bureau of Land Management (BLM). Helms recently said that the Hawkeye and another Hess project may be delayed until next year.

Without quick BLM approval, the project will have to wait until next year’s spring and summer construction season, Helms said. Delays in the project originally stranded 50 MMcf/d, but Hess has found ways to work around that and reduce the total by about half, he said. "That total is still very significant."

There is an added 40 MMcf/d of stranded gas because of another delayed pipeline, and Helms referred to major bottlenecks that are preventing gas processing plant and pipelines from coming online before September next year.

Hess currently operates five pipelines crossing Lake Sakakawea, which is the third largest man-made lake in the nation, stretching across part of the Missouri River basin and bordered by six counties, including North Dakota's four largest oil/gas producing counties. Two pipelines date back to 1956, and the other three were built in 1992.

One of the 1992-vintage pipelines, which carries gas from the Tioga Gas Plant to Northern Border Pipeline, will be converted to oil service. Hess is proposing in its Hawkeye project to add an oil facility with storage tanks and truck unloading areas, three sets of PIG launchers and receivers, four emergency shut-off valves and two mainline valves.

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