Oklahoma-based Oneok Inc. is moving ahead with an expansion of its natural gas processing plant in North Dakota’s Bakken Shale.
The Demicks Lake gas processing plant plans to add 200 MMcf/d of capacity, which would push overall natural gas liquids (NGL) processing capacity to 1.2 Bcf/d. The $400 million expansion is scheduled to be completed by the end of 2019.
"Site preparation work is now 100% completed, and civil construction is in the beginning phase," said North Dakota Pipeline Authority’s Justin Kringstad, executive director. The regulatory agency tracks midstream infrastructure projects and available takeaway capacity in North Dakota, where average production is more than 1 million b/d of oil and more than 2 Bcf/d of gas.
Demicks is considered to be in the core of the Bakken, according to Oneok. The expansion is supported by acreage dedications and fee-based contracts. Oneok has more than one million acres of dedicated in the core and up to three million acres statewide.
Kringstad told NGI's Shale Daily on Wednesday that Demicks is one of six new or expanded processing plants scheduled to come online before the end of next year. "Combined, the six plants will add nearly 1 Bcf/d in added capacity (965 MMcf/d) in the state. Total investment for the projects is $1.3 billion."
The added gas capacity is viewed as a way for the state to get back on track to meet anti-flaring (gas capture) goals that have been in jeopardy in recent months.
Oneok is the Bakken’s largest NGL mover, and it’s working to further expand its liquids infrastructure with the 900-mile, 240,000 b/d Elk Creek Pipeline project from the Williston Basin to the Midcontinent. The $1.4 billion project is supported by long-term contracts and is scaleable up to 400,000 b/d.
The southern section of the pipeline is expected to be in service by 3Q2019, according to CEO Terry Spencer, who spoke on Wednesday at the Barclays CEO Energy-Power Brokers Conference in New York City. The project, he said, “strengthens our position in the high production areas” of the Williston, Powder River and Denver-Julesburg basins.
Spencer also stressed that the 20-inch diameter Elk Creek pipeline is supported by 10-15 year contracts for 140,000 b/d of capacity and with 70,000 b/d of minimum volume commitments by shippers.
Regarding the Demicks expansion, Spencer told the conference audience that growth in the Williston "continues with enhanced well-completion techniques driving increased production and lower breakeven economics," but gas capture targets continue to "put oil production at risk without additional midstream infrastructure investments."
Early this year, Oneok outlined plans to invest $2.3 billion by 2020 on projects including the North Dakota plant expansion and a Midcontinent-to-Gulf Coast NGL pipeline, along with a fractionation facility in Mont Belvieu, TX.