Badlands NGL LLC has agreed with the largest Bakken Shale producer, Continental Resources Inc., for long-term ethane supplies for a $4.2 billion polyethylene (PE) manufacturing project.

The plant was announced a year ago by North Dakota Gov. Jack Dalrymple (see Shale Daily, Oct. 13, 2014). In addition, other key agreements have been inked recently, and the project may be expanded, according to Badlands officials, but the timeline for construction has slipped.

Delaware-based Badlands NGL and Dalrymple have characterized the proposed facility as a world-scale plant and the largest single private investment in North Dakota’s history.

Badlands CEO Jeffrey Gilliam called the Continental deal “a major milestone,” given the company’s scale in the Williston Basin and its Bakken/Three Forks shale plays.

“We believe that by creating an indigenous demand for ethane in North Dakota, large ethane producers like Continental, will realize increased netback for their ethane; it’s a great vote of confidence for our project that Continental will be a supplier,” he said.

Other agreements have been signed recently that are critical to Badlands moving ahead with building its processing facilities. Officials said they are talking with many Bakken producers. They are not saying what volumes of ethane are involved in the Continental agreement.

“During the past several weeks, Badlands has signed licensing agreements with key technology partners and finalized other agreements,” Gilliam said. “As a result of our ongoing discussions with both North Dakota and Western Canadian natural gas liquids (NGL) sourced ethane feedstock suppliers, Badlands will increase the size of its plant from 1.53 million annual metric tons of PE to 2 million annual metric tons, or 4.4 billion pounds, annually.”

The project’s timetable will be set by the results from these ongoing discussions with NGL suppliers on both sides of the U.S.-Canada border, but a Badlands spokesperson told NGI‘s Shale Daily that the original proposed 2017 start date was “aggressive,” and lining up deals with producers “has taken longer than anticipated. We’re not announcing any revised construction timeline at this point, but I think it is safe to say it will be beyond 2017.”

The plant could “significantly” reduce the amounts of associated natural gas that is currently flared in the state, Gilliam said (see Shale Daily, Sept. 18).

“There is still a lot of ethane up here,” the North Dakota-based spokesperson said. “Production in the Bakken has held pretty steady, so we have a lot of ethane. We think that both here and in Canada, as production increases, the ethane supplies will continue to grow and our plant will be in a position to help solve what is a big problem for the region: a lot of hot [NGL-rich] gas, and once you take the ethane out, it makes it a whole lot easier to increase the value of everything else.”