Bakken booms in Bismarck

Energy industr y packs the state capital for annual conference

BY KRIS BEVILL

More than 200 attendees crowd into a session covering natural gas utilization techniques at the 22nd annual Williston Basin Petroleum Conference on May 20 in Bismarck, N.D.

The 22nd annual Williston Basin Petroleum Conference opened to a packed house on Tuesday, May 20 as attendees from 48 states and nine countries flocked to the Bismarck Civic Center in Bismarck, N D , to hear experts address topics ranging from liquid natural gas utilization to transportation logistics and housing

Nearly 4,000 people were pre-registered for the three-day event, which was hosted by the North Dakota Petroleum Council, the North Dakota Department of Mineral Resources and the Saskatchewan Ministry of the Economy

One of the first day’s afternoon sessions, titled “Williston Basin Solutions,” became a standing-room only event as more than 200 people crowded in to learn more about their options to best utilize some of the Bakken’s resources

Patrick Hughes, CEO of Watford City, N D -based Prairie Companies delivered an overview of the company ’ s subsidiary, North Dakota LNG, which recently announced plans to establish a liquid natural gas (LNG) production facility in Tioga, N D , later this year NDLNG expects to begin producing 10,000 gallons of liquid natural gas each day by the end of July using residue gas obtained from the adjacent Hess Corp. natural gas processing plant. By the end of the year, Hughes says he expects the NDLNG plant to produce up to 66,000 gallons of LNG every day

In a press release announcing the project earlier in the month, NDLNG touted the potential benefits of its product to the agriculture industry as a substitute for propane But at the petroleum conference, the sole focus was oilfield applications of course Hughes said LNG can be used to completely displace diesel fuel in drilling rigs or can be used in bifuel applications The technology is fairly new the first LNG-powered drilling rig in the U S debuted in 2010 but he said advances in equipment have made it increasingly easier for drillers to apply the technology since then and estimated that there are now between 50 and 60 rigs in U S oilfields operating on either 100 percent LNG or a combination of the two fuels. He wasn’t able to specify how many of those rigs might be operating in the Bakken, but said they are becoming more common and predicted that most rigs coming into this area will use a combination of diesel and LNG rather than 100 percent LNG

Drillers can also conver t existing rigs to become bifuel compatible. Companies such as Williston, N D -based Eco Alternative Fuel Systems Inc (ECO AFS) have developed conversion kits which can be installed on rigs w ithin a few days w ithout disrupting operations, he said Once installed, the bifuel systems can reduce diesel fuel demands by more than 50 percent.

The amount of fuel used by each rig varies, but Hughes estimated that a 50-50 system would consume about 300 fewer gallons of natural gas than diesel

Refinery Update

John Stumpf, senior vice president of business development and midstream at MDU Resources, offered attendees an update on the progress of the Dakota Prairie Refinery currently under construction near Dickinson, N D

Fewer attendees were on-hand for the update compared to previous presentations, perhaps because of the scale of the project, which Stumpf described as “not a large project in Bakken standards ” The project is estimated to cost $350 million

Regardless of its size, the refinery is the first greenfield refinery to be built in the U S in more than 30 years and has required the collaborative work of four engineering firms, including Bismarck-based Bartlett & West and Barr Engineering, as well as the state, county and several company stakeholders Having so many parties involved has made the project challenging, but project leaders embraced the “design as you build” concept and have stayed on schedule since the groundbreaking last April, Stumpf said. The facility is currently 60 percent complete and is expected to enter the commissioning phase in October, with the first product shipments expected by early January Costs have exceeded initial expectations, however, and the project is $50 million over budget.

“It sounds like a slam dunk right now, ” he said “Of course anything can happen between now and then [but] I’m smiling for the first time in months ”

Todd Borgmann of Calumet Specialty Products Partners said the refiner y will pur-

Studies Show

companies that boost employee morale enjoy lower turnover, better financial performance than industry peers, improved track records on safety and higher quality job applicants.

Prairie Business

will salute the 50 Best Places to Work in the September issue. The top 25 small companies* and the top 25 large companies** will be featured.

com clicking chase crude from anywhere “south of the lake [Sakakawea]” and will take in 20,000 barrels ever y day, producing a variety of products on the other side Included will be 6,500 barrels per day of naptha, which Borgmann noted has a large and growing market in Canada, as well as 6,500 barrels per day of atmospheric bottoms, referred to as ATB, which is a product of interest to refineries.

Perhaps the most widely anticipated product locally of the Dakota Prairie Refinery is the 7,000 barrels per day of No. 2 diesel that will be produced and sold into the local market at rack rates rather than utilize another distribution method “It’s pretty simple. We want to support the community and sell it to whoever wants to come buy it,” Borgmann said When asked if he has any doubt the market will be there to purchase the fuel, Borgmann smiled and said, “No, I think we’ll be able to sell it We’ve had quite a bit of interest ” Further, he said the refinery may consider producing No. 1 diesel in the future, but the market is “ so hot” for No. 2 diesel currently, it will focus on production of that product PB

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