Proposed pipeline offers access to Bakken gas

WBI Energy plans to deliver natural gas to underserved markets

BY KRIS BEVILL

WBI Energy Inc., the pipeline and energy services subsidiary of MDU Resources Group Inc., plans to begin seeking customers this month for natural gas supplied via a proposed 400-mile pipeline system capable of transporting approximately 400 million cubic feet (MCF) per day of gas from the Williston Basin to end-users in eastern North Dakota and western Minnesota. Barry Haugen, executive vice president and chief operating officer at WBI, says the company is “cautiously optimistic” there will be sufficient demand for the product and says the targeted areas for use have been historically underserved markets for natural gas.

According to WBI, natural gas demand in the upper Midwest varies significantly from summer to winter, with a community the size of Fargo-Moorhead having a demand as high as 100 MCF per day on a cold day in winter. This demand is about 25 percent of the proposed pipeline’s capacity of 400 MCF per day. Industrial users consume much more gas, however, and are WBI’s primary target end-users. Fertilizer plants, such as the proposed plants to be built near Jamestown and Grand Forks, N.D., could use as much as 80 to 90 MCF per day. “They would be very big users and very large potential customers,” Haugen says.

receipt points before being shipped via pipeline, but Haugen says WBI believes the pipeline’s needs could be met without requiring additional processing plants in the Bakken. “At this point, the processing capacity and what’s on the drawing board appears to be adequate, at least for near-term projections,” he says.

Aside from providing markets with a fuel source, WBI’s pipeline plan presents at least a partial solution to the questions of how to utilize increasing amounts of natural gas produced in the Bakken and decrease the amount of fuel flared at well sites. According to the North Dakota Industrial Commission Department of Mineral Resources, natural gas production at Bakken wells reached an all-time high in April, topping 860 MCF per day. Those numbers are expected to only increase in the future as oil wells age and the gas-to-oil ratio continues to climb.

The 400-mile-long natural gas pipeline system proposed by WBI Energy Inc. would deliver at least 400 million cubic feet per day of natural gas from the Bakken region to customers in eastern North Dakota and western Minnesota.

IMAGE: WBI ENERGY INC.

The proposed route for the pipeline system would begin about 20 miles southwest of Williston and stretch throughout North Dakota to an interconnection with Viking Gas Transmission northeast of Moorhead, Minn., opening up the possibility for service to customers in Minnesota and other Midwest markets in addition to North Dakota. Pipeline capacity could be expanded to more than 500 MCF per day if demand warrants the increase, according to WBI.

It is possible that the permitting and land acquisition process could begin later this year, keeping the project on track to be constructed and complete in 2016. Because Bakken natural gas is liquids rich it must be processed at

The growing amount of gas produced in the Bakken means more take-away options will be necessary to utilize the gas, but it also means greater concern over the amount of gas being flared. Natural gas processors have been adding gathering and processing capacity to handle more of the gas produced, but the percentage of gas flared at Bakken well sites continues to hover at around 30 percent. The Department of Mineral Resources reported that 29 percent of the more than 26 billion cubic feet of gas produced in March was flared, equating to about 242 MCF per day. Haugen says it would be difficult to identify a direct correlation between the pipeline project and flaring levels, but that the addition of any facility that moves gas out of the Bakken will help reduce flaring. “There’s always timing issues, but we’re of the opinion that any infrastructure like this that provides additional markets for that gas is going to help alleviate flaring for sure.” PB

Kris Bevill Editor, Prairie Business 701-306-8561, kbevill@prairiebizmag.com