North Dakota has approved initial support for a $2.8 billion gas-to-liquids (GTL) plant envisioned for Trenton in Williams County, in the heart of the Williston Basin.

North Dakota Production

The North Dakota Development Fund (NDDF) is providing $3 million in initial development capital to project sponsor Cerilon GTL Inc., Gov. Doug Burgum’s office said. NDDF provides flexible funding through debt and equity investments for new or expanding North Dakota primary sector businesses.

“Our paramount goal is to deliver sustainable, long-term value to our stakeholders, community and the environment,” said Cerilon Chairman Nico Duursema. “The state-of-the-art GTL facility will be the lowest carbon footprint facility of its kind in the world.”

Calgary-based Cerilon plans to use the funding to advance the remaining development ahead of the first phase of the GTL facility’s construction. The initial phase is expected to produce 24,000 b/d of ultra-low sulfur diesel and other specialty products.

Construction is slated to start in early 2023, Burgum’s office said. “The location will allow rail and pipeline access and offers carbon sequestration opportunities. Cerilon GTL anticipates the establishment of additional phases and other facilities as part of its vision for the complex.”

The facility “has the potential to be one of the largest economic expansion projects in the history of North Dakota,” said state Commerce Commissioner James Leiman. “GTL facilities support the oil industry while reducing environmental impacts.

“The Williams County facility will be one of many expansions that make North Dakota a leader in carbon neutrality.”

The governor has set a goal for North Dakota to become carbon neutral by 2030.

“The global investment community and markets are demanding low carbon energy,” Burgum said. “North Dakota is well positioned to be a global leader and coveted location for businesses who are looking to expand and respond to the many factors that are currently shaping the future of energy.”

Why Are Gas Outlets Needed?

The Cerilon news follows recently announced plans by Bakken Energy LLC to develop a $2 billion-plus low carbon hydrogen hub in North Dakota, with operations slated to begin by late 2026. The hub envisions splitting hydrogen from natural gas, and capturing the resulting carbon dioxide emissions.

Oil producers in the Williston’s prolific Bakken Shale are perpetually seeking outlets for rising volumes of associated natural gas, particularly as the state has tightened restrictions on gas flaring.

“There is absolutely no financial incentive for anyone to flare at this point,” said Department of Mineral Resources Director Lynn Helms last week, in reference to current high gas prices.

In related news, pipeliner Oneok Inc.’s COO Kevin Burdick  during the second quarter earnings call said the rising gas-to-oil ratios (GOR) in the Bakken “continue to present opportunities for volume growth without the need for additional producer activity.”

GORs in the Williston have risen more than 75% since 2016, Burdick said. Oneok operates an extensive network of natural gas and natural gas liquids processing, transport and storage infrastructure throughout the central United States.

“Recent projections from the North Dakota Pipeline Authority show that even in a flat crude oil production environment, GORs could increase an additional 45% in the next seven years,” Burdick said. That could add 1.3 Bcf/d of output.