Oneok Partners LP said Wednesday it plans to invest $140-160 million to build a 270-mile natural gas gathering system and related infrastructure in Divide County, ND, in the heart of the Bakken Shale.
The Tulsa-based partnership said the Divide County system, which it expects to be completed in the second half of 2013, will deliver natural gas to its 100 MMcf/d Stateline II processing facility in western Williams County, ND, which itself is scheduled to be in service in the first half of 2013 (see Shale Daily, Jan. 25, 2011). Oneok Partners said it has secured long-term supply commitments from producers structured with percent-of-proceeds and fee-based components.
“Expanding our natural gas gathering system into Divide County will open up new development potential for the partnership and will give producers developing the Bakken Shale and Three Forks plays the infrastructure they need to process and deliver natural gas to the marketplace,” said Oneok Partners President Terry K. Spencer.
Excluding the Divide County system and Stateline II, the partnership has announced plans to invest about $1.5-1.8 billion in several natural gas gathering, processing and natural gas liquids (NGL) projects in the Bakken by 2014. Those projects include construction of the Garden Creek and Stateline I natural gas processing plants — each with 100 MMcf/d capacity — and the Bakken Pipeline, an approximately 500-mile NGL pipeline that will connect to the Overland Pass Pipeline.
The Garden Creek Plant went into service last December (see Shale Daily, Jan. 13, 2012). Meanwhile, the Bakken Pipeline and Stateline I are both expected to be completed by the first half of 2013.
North Dakota state law — also known as the Century Code — allows gas produced with crude oil from an oil well to be flared for a one-year period from the date of first production from the well. After one year, the flaring must cease and the well must be either capped, connected to a gas gathering line or equipped with an electrical generator that consumes at least 75% of the gas from the well.
“This project is the latest example of our ongoing commitment to provide value-added services to producers and reduce the amount of natural gas being flared in the Bakken Shale,” Spencer said.
According to Oneok Partners, it is the largest independent operator of gas gathering and processing facilities in the Williston Basin, with a natural gas gathering system of more than 3,500 miles and dedications of more than 2.2 million acres. The partnership added that once the Divide County system is online, it will have the necessary infrastructure in place to fill all four of its gas processing plants in the Bakken Shale and Three Forks regions.
Development activity in the Bakken/Sanish/Three Forks play has shown a significant increase over the last year. According to NGI’s Shale Daily Unconventional Rig Count for the week ending March 30, the number of rigs actively drilling for oil and gas in the play has jumped 31% from 173 rigs a year ago to 227 rigs today.
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