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Summit to Invest $300M in Bakken Projects

Privately held, Dallas-based Summit Midstream Partners LLC on Tuesday outlined $300 million in new investments in its gathering operations related to the Bakken Shale play in North Dakota. Four new investments related to separate operating units will support expansion activities.

The latest infusion brings Summit's capital investment portfolio to more than $2 billion and comes within days of the company's 40% acquisition of two companies developing midstream infrastructure in the Utica Shale play in southeast Ohio (see Shale Daily, June 4).

The four new Bakken development projects involve Tioga Midstream, Divide System, the Stampede Rail Connection and a Kodiak Oil and Gas Corp. gathering system, representing about $300 million in further capital expenditures for Summit, which owns and operates gathering systems in the Williston, Fort Worth, Piceance and Appalachian Basins.

"These [latest Bakken] projects will expand Summit Investments' crude oil, water and associated natural gas in Williams and Divide counties in North Dakota," a spokesperson said. "It will provide customers with additional interconnections to help maximize the value of the crude oil gathered by each of Summit's Bakken Shale gathering systems.”

Summit's Tioga Midstream unit has agreed with "a leading independent Bakken producer" to develop new crude, water and associated gas gathering infrastructure, serving acreage in Williams County. Tioga will construct more than 240 miles of pipeline, increasing its total system capacity to 20,000 b/d of oil; 25,000 b/d of water; and 14 MMcf/d of associated gas under a 10-year fee-based gathering contract.

"The new pipeline system [involving 114,000 dedicated acres] will reduce flaring as it gathers gas in an area that is remote from existing infrastructure and moves it to the producer's own natural gas processing plant," the spokesperson said.

Another unit, Meadowlark Midstream, inked a long-term crude oil transportation agreement with Samson Resources Co. to provide oil transportation for its Ambrose Field in Divide County. Meadowlark is expanding the Divide System footprint by installing oil pipeline infrastructure to connect specific Samson wells that currently are being serviced by trucks. The first pipeline takeaway at these wells should start in the third quarter, Summit said.

Meadowlark separately has signed a deal with Global Partners LP to build a crude oil truck unloading station and a 47-mile oil pipeline serving Basin Transload's Stampede rail terminal in Burke County, ND.

"With this project, Meadowlark will provide customers with a new interconnection for up to 50,000 b/d of crude oil deliverability," said the spokesperson, adding that this will provide "optionality" to access new downstream markets in both the West and the East. "The project is also designed to attract incremental crude oil production that is currently being trucked from pad sites in Divide County."

With Kodiak, Meadowlark also has agreed to "significantly expand" its Polar System in Williams County. It will expand the existing system to connect more than 60 possible pad sites that Kodiak has indicated it will develop in its Polar Field during the next several years, the Summit spokesperson said.

Summit Investments CEO Steve Newby said the latest plans help to solidify the company's position as "a leading, independent midstream provider in the Bakken Shale."

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