Pushing for more pipe

Pipeline projects pile up as Bakken crude, gas production increases

BY KRIS BEVILL

About 150 industr y members and federal state and local officials gathered in Bismarck, N.D., June 24 for the second Governor’s Pipeline Summit, held at the Bismarck State College National Energy Center of Excellence The summit was attended by representatives from some of the region’s biggest players in the pipeline industry, including WBI Energy, Enbridge, Alliance Pipeline, ONEOK and TransCanada, as well as newcomers looking to make an entrance into the bustling Bakken region, which continues to struggle against lagging infrastructure necessary to transport the approximately 1 million barrels of crude now being produced each day

Gov Jack Dalr ymple commended pipeline developers for their work to this point in his welcome remarks, noting that the state’s crude oil pipeline capacity will reach 783,000 barrels per day by the end of the year, compared to just 286,000 barrels per day in 2009 But he also pressed those developers to continue- expanding the state’s infrastructure to gather natural gas at the wellhead in order to reduce flaring and to pursue larger pipeline projects to transport crude to markets outside of the state

“We have made tremendous progress in expanding our interstate oil and natural gas pipelines as well as our in-state gathering systems, but we must continue to develop pipeline systems that safely move our energy resources to more markets and reduce the flaring of natural gas, ” he said.

Several large pipeline projects have been proposed that, if realized, would increase the state’s oil takeaway capacity to about 1 4 mil- lion barrels per day by the end of 2016 Among them, Enbridge’s recently approved Sandpiper line, which includes a lengthy stretch running from Tioga, N D , to Clearbrook, Minn , capable of hauling 225,000 barrels of crude per day, and Energy Transfer Partner’s 320,000 barrelper-day Bakken Pipeline, which it says would run from the Bakken to Patoka, Ill.

Brent Secrest, v ice president, cr ude oil, for Houston-based Enterprise Products Partners, unveiled his company ’ s proposed pipeline during the governor ’ s summit, noting that while his company is not yet a major player in the region, it is bullish on the Bakken’s long-term crude output potential The company is proposing to construct a 1,200-mile pipeline stretching from Stanley, N D , to Cushing, Okla , which is home to some of the largest oil storage capacity in the U.S. and is a clearing point for WTI (West Texas Intermediate) contracts The proposed pipeline would haul 200,000 barrels of crude per day and could be complete by the end of 2016, Secrest said.

In his presentation on Bakken trends, KLJ CEO Niles Hushka predicted accelerated investments in infrastructure as outside investors continue to realize that the Bakken is a long-term play He also noted that companies are willing to spend “disproportionate amounts of capital” to transport produced water, perhaps in response to safety concerns and the high cost of cleaning up produced water spills That has opened up the opportunity to test new materials that are better able to handle produced water, such as nylon 6/6, which KLJ is currently testing and expects to be deployed sometime this year

For engineering firms, Hushka says the push for additional pipelines presents opportunities and challenges as firms tr y to keep up with the pace of development “Pipeline engineers are impossible to find these days because demand far exceeds supply,” he says To cope with the shortage, he says firms are shifting engineers with similar experience into pipeline work and training them as fast as possible to design and observe the construction of pipelines PB

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

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