Bismarck, ND-based MDU Resources Group Inc. sees growth in its infrastructure businesses building natural gas pipelines and supplying construction services and materials as the Biden administration’s omnibus infrastructure bill passed the U.S. Senate Tuesday.
The Biden administration’s “infrastructure proposals will provide additional multi-year opportunities to some of our core businesses, such as surface transportation improvements, renewable energy, power grid modernization, broadband and much more,” said CEO David Goodin. He spoke during a second quarter earnings conference call.
Goodin said the business segments that include WBI Energy, MDU Construction Services and Knife River Materials would benefit from an infrastructure expansion. The company also is looking for acquisitions in the construction sector.
MDU has begun decommissioning its coal-fired generation plants in North Dakota. However, pipeline unit WBI plans to spend $75 million to build a 60-mile, 12-inch diameter pipeline to bring gas service to the eastern part of the state.
WBI also is building the $260 million North Bakken expansion project that would add 245 MMcf/d of capacity. WBI’s total capacity then would be 2.4 Bcf/d. The pipeline would reduce wellsite flaring and move more Bakken Shale gas to market, Goodin said.
WBI CEO Trevor Hastings said as the pipeline is being constructed, conversations with potential shippers are underway as activity picks up. “It’s back to about 95% of its gas production, even though oil is only at about 70%,” he said.
The North Dakota Pipeline Authority has indicated additional gas processing would be needed by the mid-2020s. “Our North Bakken pipeline is strategically located given those factors,” Hastings added. “We’re situated real well as the Bakken continues to regain its footing and production, and the project also is readily expandable with compression.”
MDU’s construction services and materials business units racked up record earnings and a combined backlog exceeding $2 billion.
Goodin said MDU is actively looking for “strategic acquisition opportunities that will enhance our existing footprint and appropriately expand our business. Our focus continues to be to produce significant long-term value as we execute on our business plans, organic growth projects, and targeted acquisitions.”
MDU reported 2Q2021 earnings of $100.2 million (50 cents/share), compared with $99.7 million (50 cents) for the same period in 2020.
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