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NatGas Pipeline in Eastern North Dakota Is A Go; Oil Line, Not So Much

While court and regulatory rulings hover over a number of major pipeline infrastructure projects elsewhere in the state, Bismarck-based MDU Resources Group is proceeding with a new natural gas transmission pipeline for far-eastern North Dakota and parts of western Minnesota.

MDU pipeline and midstream unit WBI Energy Inc. said on Wednesday it is proceeding with the Valley Expansion Pipeline, which would bring natural gas to a number of towns for the first time. Earlier this summer, WBI received "significant interest" from its customers in the region, and that has driven plans for the project (see Daily GPI,June 14).

WBI officials confirmed that the company has obtained the capacity commitments to support the 38-mile, 16-inch diameter transmission pipeline that will link its system to the Viking Gas Transmission Co. pipeline in western Minnesota. Survey work is now underway, and construction of the new line between Mapleton, ND, and Felton, MN, is expected to begin in 2018.

Current cost estimates for the project are placed at $55-60 million, according to WBI CEO Martin Fritz. Up to 40 MMcf/d of natural gas would be transported. The project still needs to gain Federal Energy Regulatory Commission approval.

"This project was initiated because of customer interest in bringing more natural gas to growing eastern North Dakota and western Minnesota," Fritz said. "We have signed agreements with our customers and we are excited to move forward with the pipeline that will enhance the security of our existing system and support growth in the Red River Valley."

Separately, North Dakota officials have given the go-ahead to a number of in-state projects that are in various stages of development (see Shale DailyAug. 30), and they are also examining allegations that another oil and gas pipeline project being built has not been properly constructed by a contractor working for Texas-based Paradigm Energy Partners LLC.

For the in-state midstream projects, the North Dakota Public Service Commission (PSC) oversees the work. The $125 million oil and gas pipeline Lake Sacagawea project involves 16-inch diameter pipelines and a somewhat controversial lake crossing under the base of a narrow, 1.5-mile wide portion of a man-made lake.

Because of allegations raised by union and Native American tribal sources, the Pipeline and Hazardous Materials Safety Administration and the Mandan, Hidatsa and Arikara Nation are investigating the appropriateness of some of the project's construction. Court fights are ongoing between the tribes and the project backers, and the pipeline so far has won the right to continue building the 91-mile project.

While the legal and regulatory arguments are not likely to be resolved soon, Paradigm Energy needs the  project, which is aimed at eliminating existing bottlenecks for oil producers getting their product to rail and pipeline takeaway facilities, to be completed by Nov. 1, or it could lose its anchor shipper.

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