With rig counts, prices and liquids all moving up, the incidence of natural gas flaring in the Bakken Shale play is expected to continue to decline throughout this year, the head of the North Dakota Petroleum Council, Ron Ness, told NGI‘s Shale Daily Wednesday, responding to questions about a report on the state’s record-setting oil/gas operations from the state Department of Mineral Resources (DMR).

North Dakota continued on a record-setting pace for oil and natural gas production at the end of the first quarter, according to DMR Director Lynn Helms, who also mixed caution with optimism in his most recent monthly “Director’s Cut” report released late last month (see Shale Daily, May 30).

Ness expressed bullishness about further development of the Bakken. “For flaring to drop from 36% to 32% despite having a thousand new wells come on line is pretty positive, and we still have $3 billion in new plants coming on line the rest of the year,” Ness said.

Earlier this year Bakken flaring was predicted to drop by more than 100 MMcf/d, or by two-thirds, with more than 300 MMcf/d of gas processing capacity expected to be added in 2012, according to DMR sources (see Shale Daily, Jan. 20).

A DMR spokesperson confirmed that three new and one upgraded gas processing plants are expected to start operations before the end of the year. She put a $3.5 billion value on those investments and noted that further reductions in gas volumes flared will result from all of the new plants

Helms’ monthly report also said the average price for natural gas delivered to Northern Border Pipeline at Watford City increased to $2.29/Mcf, resulting in an oil-to-gas price ratio (1 bbl to 1 Mcf) of 33-to-1. He added that the continued high liquids content (30%) in the gas currently makes it economic to gather and process Bakken’s associated gas.

“Certainly we are doing what needs to be done, and that is building the infrastructure,” said Ness, acknowledging that the continuing viable market for liquids helps support this growth. “One of the valuable things about the Bakken and its gas is that it is some 30% liquids and is pushing a lot of pipelines to move those supplies. I think we are seeing a lot of secondary-type valuations.”

Rig counts have climbed steadily, moving from 202 in February to 209 in April, according to Helms.