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State Dept. OKs Canadian Ethane Pipeline Link in North Dakota

The Obama administration has issued a presidential permit for the 80-mile U.S. pipeline link in North Dakota that is slated to carry ethane as part of a 430-mile international pipeline through Saskatchewan and terminating in Alberta.

The North Dakota Public Service Commission approved the U.S. portion of the C$300 million Vantage Pipeline project last year (see Shale Daily, June 25, 2012) and the Canadian National Energy Board gave the green light in January 2012.

U.S. Sen. John Hoeven (R-ND) welcomed the Obama administration approval, but noted that the northern leg of the Keystone XL oilsands pipeline project has been waiting five years for a similar permit for its northern leg, while it took three years for the Vantage project. Hoeven urged Keystone's approval, too, for economic and energy security reasons (see Shale Daily, March 4).

"The Vantage Pipeline is another major piece of infrastructure that will help us build our North American energy security partnership with our closest friend and ally, Canada," said Hoeven, adding that the ethane project illustrates how new pipelines can create jobs and add to U.S. energy security. "It will enable us to reduce flaring in North Dakota and also reduce emissions where the natural gas is used by industry."

Sponsored by Calgary's Nova Chemicals Corp., the 10-inch diameter pipeline would carry ethane to Canada from Hess Corp.'s expanded gas processing plant in the Bakken Shale near Tioga, ND. The project originally set a ramp-up date for the middle of 2013.

David Schmunk, COO of Mistral Energy US Inc., which has a limited partnership in Vantage, said a new revenue source for Bakken producers would enable ethane sales to the plastics industry in Western Canada, as well as less gas flaring. He credited Hoeven with a "substantial and sustained effort" to cut through the environmental review and other permitting processes at the U.S. State Department. Hoeven said he has been pressing for the project's approval since it emerged in the fall of 2010.

The Vantage project is expected to provide for about 400,000 man-hours of construction work, injecting C$300 million into both nations' economies, Hoeven said. While expanding the market for his state's natural gas supplies, he said Vantage would "create financial opportunities for service providers and increase revenues for local cities and counties along the route."

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