As processing capacity has come online in 2019, natural gas production from the Bakken Shale has been booming, and Western Canada producers stand to lose out as they compete with more molecules seeking markets in the Midwest.

That’s according to a recent analysis from RBN Energy LLC, which highlighted a wave of recent processing capacity additions in North Dakota as the state has sought to rein in flaring.

After more modest capacity additions in 2017 and 2018, “2019 turned out to be the biggest year yet for new processing capacity in the Bakken,” RBN analyst Housley Carr said. “A record 710 MMcf/d has started up in the past 11 and a half months, giving the region a total of nearly 3.2 Bcf/d — seemingly enough to handle all the gas that the play produces.”

By RBN’s count, another 625 MMcf/d of capacity has been sited and is slated to come online in 2020 and 2021.

Bakken crude oil output has “rebounded with a vengeance” since 2016, Carr noted, attributing the uptrend to a combination of stronger commodity prices and growth in oil pipeline takeaway capacity. More crude production in North Dakota has meant more associated gas and natural gas liquids volumes, the analyst said.

The latest data from North Dakota officials showed record output for October, including more than 1.5 million b/d of oil production and more than 3 Bcf/d of natural gas.

“We would expect that as the processing plants that came online in the Bakken in the past few months ramp up to full capacity, the volumes of gas being flared will decline, and flows on Northern Border and other pipelines that take gas out of the Bakken to the Midwest and other markets will increase significantly,” Carr said.

This could spell trouble for Western Canadian producers relying on Northern Border and Alliance to access Midwest markets, as those pipes serve as the primary takeaway for Bakken associated gas and have been running full for years, according to the analyst.

“The result is that Bakken gas is increasingly squeezing out imports from Alberta and British Columbia, and the raging battle between the Bakken and Western Canada for pipeline space is likely to heat up,” Carr said.

RBN’s analysis lines up with the outlook from TC Energy Corp.’s Nova Gas Transmission Ltd. (NGTL), operator of the 15,266-mile gathering and transportation system that serves the Western Canadian Sedimentary Basin.

NGTL said recently it expects only limited improvement for natural gas prices in Western Canada, and the operator projected that U.S. unconventional production will continue to create stiff competition for Canadian producers.

Spot prices so far this winter suggest Midwest gas buyers have reaped the benefits of this gas-on-gas competition. So far this winter, Chicago Citygate prices have consistently traded at a discount to benchmark Henry Hub. Spot basis for Chicago Citygate only briefly moved into positive territory in early November, when prices there peaked at an average $2.975 on Nov. 6, a 20 cent premium to Henry, Daily GPI historical data show.