MDU Resources, through its WBI Energy subsidiary, is looking to expand its natural gas pipeline network with a major new common carrier that would provide badly needed additional capacity for growing Bakken gas production.
The proposed 400-mile pipeline would stretch from about 20 miles southwest of Williston, N.D., to an interconnection with Viking Gas Transmission northeast of Moorhead, Minn.
“It’s exciting to think that the proposed pipeline could provide a new transportation route to bring Bakken-produced natural gas directly to industrial customers and commercial and residential utility customers in eastern North Dakota,” said David L. Goodin, president and chief executive officer of MDU Resources.
Through interconnecting pipelines, the proposed line could also serve Minnesota, Wisconsin and Midwest U.S. markets.
The majority of the proposed system would consist of a 24-inch diameter pipeline, and the project would include two new compressor stations, the company said.
The pipeline has been initially designed to transport about 400 million cubic feet per day of natural gas and, depending on user commitments, could be expanded to more than 500 million cubic feet per day.
Estimated at $650-700 million
The project investment is estimated to be between $650 million and $700 million.
“This project would be the largest single pipeline construction project in our company history,” noted Steven L. Bietz, president and chief executive officer of WBI Energy.
Long-term capacity commitments on the proposed pipeline will be sought during an open season expected to begin in late summer, WBI said, adding that following receipt of capacity commitments and necessary permits and regulatory approvals, construction on the new pipeline would begin in early 2016 with completion expected by late 2016.
Since 2010, WBI has invested over $150 million in energy development projects in North Dakota, including the acquisition of midstream assets near Belfield and the Dakota Prairie Refining diesel plant currently under construction near Dickinson.
The new pipeline project, combined with recent and ongoing projects, would bring the company’s total Bakken-related investment to nearly $1 billion.
To a much lesser degree, natural gas production is expected to increase along with the more valuable oil from the Bakken petroleum system. However, the gas ratio per well is expected to increase at a faster rate because oil is declining at a faster rate than gas per well.
A Bentek Energy study released in July 2012 expects an increase in Williston gas production from an average of about 536 million cubic feet per day in 2011 to 2.1 billion cubic feet per day in 2017 and 3.1 billion cubic feet per day in 2025.
More than 3,700 miles
WBI Energy now owns and operates more than 3,700 miles of natural gas transmission and gathering pipeline spanning major portions of North Dakota, South Dakota, Montana and Wyoming. The company also owns, leases and operates 33 compressor stations in this region.
Three underground storage fields in Montana and Wyoming provide storage services to local distribution companies, producers, natural gas marketers and others, and serve to enhance system deliverability. WBI’s system is strategically located near five natural gas-producing basins, making natural gas supplies available to the company’s transportation and storage customers.
WBI’s system has 13 interconnecting points with other pipeline facilities, allowing for the receipt and delivery of natural gas to and from other regions of the country and from Canada.
In addition to WBI, Northern Border Pipeline and Alliance Pipeline also are main interstate system providers currently serving the Williston. The remaining gas being produced in the basin that is not consumed locally or delivered to these interstate pipelines is flared because of inadequate gas gathering and processing infrastructure.
—Ray Tyson
