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State sees value in natural gas resources

By Alan Reed
Managing editor
Published/Last Modified on Monday, January 11, 2010 10:39 AM CST



Alan Reed|Williston Herald Expansion of the infrastructure in the state continues so more natural gas can get to market instead of being flared from well sites.
As more people are looking toward natural gas as a possible long-term solution to global energy needs, North Dakota continues to see expansion of the statewide natural gas distribution and processing systems that exist.

Big oil firms like the Exxon Mobil Corporation are getting into the natural gas market as evidenced by its December announcement that it hopes to purchase XTO Energy Inc. for $41 billion. XTO is a major player in natural gas development around the globe.

“From the state’s perspective, we’ve always seen an incredible value in the state’s natural gas,” said North Dakota Pipeline Authority director Justin Kringstad.

The ongoing expansion of oil drilling activity in the Bakken formation in western North Dakota continues to tap into major natural gas reserves. Kringstad thinks nationally and globally, some of the perspective has changed regarding the role natural gas can play as a cleaner energy source to help fight global warming.

“North Dakota is going to keep up with the development,” Kringstad said. “I think we’re in a good position to capitalize on our resources.” Lynn Helms, director of the North Dakota Industrial Commission Department of Mineral Resources, said recently the state is home to trillions of cubic feet of natural gas. The Associated Press reported recently there is a 90-year supply of natural gas in the United States.

Last month, the Williston Basin Interstate Pipeline Company finished two large natural gas pipeline expansion projects. The first is the “Sheyenne Expansion” that moves an additional 10 million cubic feet per day of natural gas to eastern North Dakota.

The second project is the “Bakken Expansion” that has an initial design capacity of an additional 32 million cubic feet per day and can be expanded to 60 million cubic feet per day. This expansion makes a connection to the Northern Border Pipeline at Ft. Buford.

Meanwhile, the big “Prairie Rose Pipeline” by Pecan Pipeline is not to be completed until the end of this month, Kringstad said. The 75-mile pipeline that is to run from Mountrail County to a connection point with Al-liance Pipeline near Towner was originally scheduled to be completed this past summer. The Bakken formation gas to be moved by this pipeline is to serve markets in the Chicago area.

A pipeline authority newsletter states what makes the Prairie Rose Pipeline unique is the Bakken gas doesn’t have to undergo the traditional gas processing before its injection into the Alliance system. Instead, the natural gas liquids such as propane and butane, are to be removed from the gas stream at a processing facility near Chicago and then sold to area markets.

This project has an overall capacity of moving 80 million cubic feet per day of natural gas.

Kringstad said the most recent numbers showing the daily production of natural gas in the state are from this past October at 253 million cubic feet.

“If you take all of our natural gas plants and the Pecan Pipeline, that takes you up to roughly 450 million cubic feet per day,” he said of the impacts of the most recent expansion projects.

Kringstad said the Hess Corporation has proposed expanding its Tioga gas plant to essentially double it.

“I haven’t heard any official releases as to when that would come on line,” he said.

Kringstad added the Williston Basin Interstate Pipeline Company also wants to expand its natural gas storage capabilities near Baker, Mont.

“Along with the increase in storage, they would have to increase the pipelines,” he said.

Kringstad said as oil drilling expands more natural gas is being tapped.

“We’re excited. The infrastructure we have in place, the biggest challenge is keeping up with the rigs on the gathering side,” he said.
 

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