A MDU Resources Group Inc. subsidiary last week launched a natural gas pipeline project that would stretch across the Bakken Shale from western North Dakota to western Minnesota, where it would connect with Viking Gas Transmission Co.’s gas system.
The WBI Energy Inc. project, the largest single pipeline construction project in company history, would increase takeaway capacity from the Bakken to accommodate gas production growth, CEO Steven L. Bietz said. Initially the $650-700 million pipeline as proposed would be built to transport about 400 MMcf/d, and with customer commitments, it could be upgraded to carry more than 500 MMcf/d.
“It’s exciting to think that the proposed pipeline could provide a new transportation route to bring Bakken-produced natural gas directly to industrial customers, and commercial and residential utility customers in eastern North Dakota,” said MDU CEO David L. Goodin. “Through interconnecting pipelines, the proposed pipeline could also serve Minnesota, Wisconsin and Midwest U.S. markets.”
The currently proposed route would stretch from about 20 miles southwest of Williston, ND, to an interconnection with Viking northeast of Moorhead, MN. Most of the system would be comprised of 24-inch diameter pipeline and include two compressor stations.
“Since 2010, we have invested over $150 million in energy development projects in North Dakota including our acquisition of midstream assets near Belfield and the Dakota Prairie Refining diesel plant currently under construction near Dickinson,” said Bietz. “This project combined with other recent and ongoing projects, would bring our total Bakken-related investment to nearly $1 billion.”
Long-term capacity commitments are to be gauged in an open season later this summer. With capacity commitments, necessary permits and regulatory approvals, construction could begin in early 2016 with completion late that year.
With wellhead associated gas flaring still about 30% in North Dakota, state officials welcomed the proposed pipeline. Gov. Jack Dalrymple said the state was committed to working with WBI “and the entire industry to further reduce flaring.” He said the project would add value to state resources and help diversify the economy.
North Dakota Pipeline Authority Executive Director Justin Kringstad told NGI that he had been involved in discussions with WBI regarding North Dakota’s production and transportation needs.
“This is a great project that would add additional market options for North Dakota gas,” Kringstad said. “It would also be a great benefit for communities and business development opportunities in eastern North Dakota.” Additional market options for the state’s gas supplies “would be a great thing as we continue to build the necessary infrastructure to capture and transport natural gas.”
Kringstad has recently underscored the need for producers to curb flaring through new gas pipelines and processing plants in the face of accelerating associated gas production that is projected to grow to 1.6 Bcf/d in 2015 from a 1.2 Bcf/d level this year. There are no takeaway options for about two-thirds of the flared gas, he said, further underscored by the fact that nearly two-thirds of the crude oil being produced also lacks a pipeline gathering system, and therefore, is trucked. That’s not an option for gas.
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