Obviously it’s a good time to be in the pipeline industry in North Dakota,” WBI Energy Executive Vice President and Chief Operating Officer Barry Haugen said in his opening remarks at the North Dakota Governor’s Pipeline Summit.
WBI Energy is a wholly-owned subsidiary of MDU Resources Group, Haugen told the summit attaendees, and its pipelines go back nearly 100 years to the origins of MDU Resources in Montana and North Dakota.
He said WBI’s regulated operations include more than 3,700 miles of gas pipeline with a daily capability of 860 million cubic feet and 11 interconnecting points to other pipelines.
WBI also has three significant storage fields, one of which, Haugen said, is at Baker, Mont. It’s the largest storage field in North America.
In addition, WBI has more than 1,900 miles of non-regulated gathering pipeline.
WBI’s history has primarily been in the natural gas gathering and transportation business, Haugen continued, and today the company has a significant footprint in the Montana, Wyoming and the Dakotas with an extensive natural gas transportation system in the Williston basin’s Bakken petroleum system. WBI also has a marketing affiliate, and the company is moving into broader areas of the midstream business.
Major 2011 projectsWBI had three significant projects in the Bakken in 2011, Haugen said. One of these projects was WBI Garden Creek project, which was a 12 mile, 12-inch residue natural gas pipeline connecting Oneok’s Garden Creek natural gas processing plant near Watford City to the Northern Border pipeline. Haugen said lines moves in excess of 80 million cubic feet per day.
Another significant project in 2011 was the expansion of the WBI Baker storage facility. Less about taking gas away from the Bakken and more about gas alternatives, he said, the Baker expansion involved new wells, added some additional trunk line, and added more compression, allowing WBI to more effectively store more gas until such time that it may be worth more or for arbitrage purposes, whether that be seasonal or market-related.
The Baker expansion increased withdrawal capacity by about one-third, adding 35 million cubic feet per day.
The third 2011 WBI project was expansion of a compressor station southwest of Williston. N.D., known as the Charbonneau plant, which allows WBI to get more gas off of its system and onto the Northern Borders pipeline destined for U.S. Mid-Continent markets.
Combined, Haugen said, the 2011 projects doubled the transportation capacity of the WBI system to well over 200 million cubic feet per day. With its 2012 projects, he added, the company is looking to double this capacity again.
2012 projectsThis year WBI constructed a 16-inch pipeline connecting Oneok’s Stateline to the Northern Borders pipeline.
Known as the Stateline pipeline, Haugen said the 12-mile line was originally scheduled to go into service in June, but he said it would probably be July before service begins. This pipeline will move residue gas from Oneok’s Stateline I and II plants.
Haugen then said it is interesting that people talk about how to get energy out of the Bakken, but from a natural gas perspective, the growth in the Bakken has also created opportunities on the local demand side, including residential, commercial and industrial demand.
He said WBI is doing piping and measurement modification at the Charbonneau plant in order to increase deliveries into the Williston area and to heavier commercial operations, such as water depots, and even to natural gas-fired electrical generation facilities in the region. That work is ongoing and will be completed later this year, Haugen said, and will double WBI’s transport capacity in that area.
Venturing into more midstream projectsJust last month, Haugen said, “we extended essentially our footprint into what we’ve traditionally done, which is pipelines, and got more broadly into the midstream business still related to the Bakken” through a 50 percent acquisition in Whiting’s Pronghorn midstream assets near Belfield, N.D. in Stark County.
The acquisition includes a gas processing plant, gas and oil gathering systems, a gas residue line that connects to WBI’s high pressure natural gas line, an oil storage terminal that is under construction, and oil pipeline facilities.
Whiting will remain the operator, according to Haugen, but with a 50 percent interest, he said WBI is excited about the opportunities that investment will bring.
Calumet Refining JVAnother non-traditional project WBI recently announced is a joint venture with Calumet Refining to build a diesel topping facility just west of Dickenson, N.D., adjacent to the Bakken Express pipeline.
The facility, he said, will have an inlet capacity of 20,000 barrels per day, which through a distillation process will produce about 10,000 gallons of diesel fuel per day that will be marketed locally. Naptha and the atmospheric bottoms will be shipped out via rail.
The project is in the early stages, he said, although “we’re certainly spending dollars on extensive feasibility, engineering design, permitting activities, and we’re excited about the possibility that this investment has as well to add value to the natural resource production of our state’s vast resources.”
Excited about the future A native North Dakotan originally from Williston, Haugen said that he and WBI are excited about the future of the state and the opportunities it offers the energy industry, despite the challenges.
And having been around for nearly 100 years, Haugen said, WBI knows it needs to maintain good relations with landowners and all stakeholders.