NEWS
FOR IMMEDIATE RELEASE
September 30, 2008
Contact: Don Canton or Ryan Bernstein
(701) 328-2200
HOEVEN, PIPELINE AUTHORITY, INDUSTRY OFFICIALS OUTLINE PETROLEUM INFRASTRUCTURE PROGRESS
BISMARCK, N.D. – Gov. John Hoeven today was joined by petroleum and pipeline industry leaders, Oil and Gas Division Director Lynn Helms and Pipeline Authority Director Justin Kringstad to outline current and scheduled progress in expanding the state’s oil and gas production and processing infrastructure.
Also joining Hoeven were Kevin Hatfield of Enbridge Pipeline Inc.; Tad True of True Pipeline Companies; Wayne Biberdorf of Hess; and John Berger, Manager of Tesoro Refinery in Mandan.
“We are working to ensure that our infrastructure keeps pace with our growing production of oil and gas,” Hoeven said. “We have made sustained progress in both the transportation and processing of our petroleum resources, and we are working to keep pace with growing production in the future.”
Expansions completed and underway today were initiated in April 2006, when Hoeven hosted a broad-based summit of oil and gas industry principals to help address the challenge of increasing pipeline capacity in western North Dakota. Summit participants included U.S. and Canadian oil industry officials, pipeline companies, petroleum producers, railroad officials and state legislators. Among the options they implemented were the Enbridge Pipeline expansion; transport or crude by rail; expand oil refining capacity; and a Pipeline Transportation Authority, which was established in the last legislative session.
CRUDE OIL
According to Pipeline Authority and industry officials, crude oil transport capacity is scheduled to expand by 86 percent through 2010, well within the 43 percent projected growth in the state’s crude oil production.
Pipeline and refining capacity in 2007 totaled 230,000 BOPD (barrels of petroleum a day), slightly ahead of peak petroleum production of 229,403 BOPD. The 229,403 BOPD is Williston Basin production, which includes crude oil from North Dakota, South Dakota and eastern Montana. This year, capacity has increased to 327,000 BOPD, and by 2010, total crude petroleum transport capacity will increase to 378,000 BOPD. That is 50,000 BOPD ahead of projected peak production of 328,000 BOPD. (See map and table for capacity and production comparisons.)
“We at the Oil and Gas Division have worked with the Governor’s office, Industrial Commission and private industry to make sure that our energy has outlets to find its way to market,” said Oil and Gas Division Director Lynn Helms. “That has meant increasing not only pipeline and rail capacity, but also working to enhance processing and refining facilities to help capture these valuable resources.”
Significant expansions include:
Enbridge Phase V: Increased capacity from 80,000 barrels of oil per day (BOPD) to 110,000 BOPD in January 2008.
Enbridge’s Phase VI: Will increase capacity by 51,600 BOPD to a total of 161,600 BOPD by first quarter of 2010.
Enbridge is also actively exploring the best proposal for additional expansion, including a link between North Dakota and Canada. The proposal has received positive feedback from shippers and is only one of the options Enbridge is currently exploring.
Butte Pipeline: Implementation of a drag reducing agent in its pipeline system to Guernsey, WY should increase export capacity by 10,000-12,000 POPD, to be completed in 3-4 weeks.
North Dakota Port Services: Establishment of a rail tank car loading facility near Minot, which will begin accepting crude shipments this week at an initial capacity of 30,000 BOPD. Expansion plans could increase capacity to 42,000 BOPD after December 1, 2008.
Rail Tank Car Facilities: In August 2008, facilities were built at Dore, Stampede, and Ryder, N.D. shipping an estimated 11,000-17,000 BOPD.
The Transcanada Pipeline Company is building major international pipelines through eastern North Dakota (Keystone Pipeline, 480,000 BOPD) and eastern Montana (Keystone XL, 500,000 BOPD). These will relieve Canadian oil sands pressure on the Guernsey, Wyoming hub and can be tapped into to carry Williston Basin crude oil. (This capacity is in addition to totals shown on the chart.)
REFINING PROJECTS
Tesoro Refinery – Mandan
From 2001 to 2007, Tesoro invested $125 million for refinery enhancements
In 2008 and 2009, Tesoro will invest an additional $125 million for increased refinery capacity and environmental upgrades.
American Lignite Energy – Underwood
32,000 barrels per day
Coal-to-Liquid technology
Three Affiliated Tribes – Fort Berthold Reservation
15,000 barrels per day
Awaiting EPA permit
Northwest Refining – Williston
· Oil and Gas Research Council funded feasibility study
1 Next Steps:
· Peer Review
1 Front End Engineering Design Study (FEED Study)
2 Permitting
NATURAL GAS
Both natural gas pipelines and processing facilities have expanded, and project further expansions in the future.
Natural gas processing capacity will increase by more than 126 percent, including four new processing facilities and three major expansions. The resulting 513 MMCFD is enough natural gas energy to fuel 1.87 million homes a year. At the same time, natural gas pipeline capacity has increased by 122 MMCFD (million cubic feet a day), and an additional 228 MMCFD has been proposed. Much of this gas was formerly flared off, so there is an environmental benefit, as well as an energy benefit to capturing the gas. Significant natural gas expansions include:
Natural Gas Processing Plants
Whiting: A new 33MMCFD Robinson Lake Processing Plant is expected to connect to Williston Basin on October 1, 2008.
Whiting: A new 10 MMCFD Ray processing plant is now in operation.
EOG: A new 20 MMCFD Stanley, ND processing plant is scheduled to come online in October 2008.
Nesson Gas Services: A new 10 MMCFD processing plant near Ray, ND came online December 2008.
Bearpaw’s Grassland Plant: An expansion from 63 MMCFD to 100 MMCFD was completed in 2008.
Hiland Partners’ Bowman Plant: An expansion from 4 MMCFD to 40 MMCFD in Bowman County was completed in 2008.
Hess Tioga Plant: An expansion from 120 MMCFD to 250 MMCFD is currently in the planning phase.
Natural Gas Pipelines:
Alliance Pipeline: has filed with FERC in September 2008 to enable Pecan Pipeline to transport “rich” Bakken gas from the Mountrail County area to markets in Chicago. The project is scheduled to begin shipping 20-40 million cubic feet per day (MMCFD) in 2009 and increase to 80 MMCFD in 2010.
Williston Basin Interstate Pipeline Co.: has an expansion planned for November 2008. The project is called the “Bakken Expansion Project” and has an initial design capacity of 32 MMCFD and is expandable to 60 MMCFD. The expansion links Williston Basin’s pipeline to Northern Border Pipeline near Ft. Buford, ND.
Williston Basin Interstate Pipeline Co.: has an expansion plan to increase natural gas delivery to the eastern portion of ND. The expansion will increase capacity in the Sheyenne Sub-System from 35 MMCFD to 45 MMCFD in November 2008.
Williston Basin Interstate Pipeline Co.: is actively marketing to obtain shipper support for their “Bakken Pipeline.” The proposed pipeline would deliver “rich” Bakken gas to Alliance Pipeline with an initial capacity of 100 MMCFD and could be expanded to 200 MMCFD.
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