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Mike Nowatzki, Forum News Service, Published October 29 2013

Gov. Dalrymple says new pipeline should help reduce flaring

BISMARCK – A natural gas pipeline recently built in western North Dakota is a “significant” piece in the effort to reduce flaring in the state, Gov. Jack Dalrymple said Tuesday as he and Alliance Pipeline officials announced the project’s completion.

The 80-mile-long Tioga Lateral Pipeline will move natural gas from Hess Corp.’s gas processing plant near Tioga and tie in to the existing Alliance mainline near Sherwood, just south of the Canadian border in Renville County. From there, the gas will make its way to processing facilities and other market connections in the Chicago area.

The 12-inch-diameter pipeline has the capacity to move 126.4 million cubic feet per day of rich natural gas out of the Williston Basin – gas that might otherwise be flared as a byproduct of oil production.

“I think it is significant and the capacity is substantial,” Dalrymple said.

However, while the pipeline was ready for service on Sept. 1, gas won’t move through it until Hess Corp., which has contracted with Alliance to use about 50 percent of the pipeline’s capacity, finishes doubling the processing capacity of its Tioga plant to 250 million cubic feet per day. Steve McNally, Hess Corp’s general manager for North Dakota, said the expanded plant will open soon, but he wouldn’t say exactly when, saying more details would be available in the company’s quarterly report due out Wednesday.

Alliance plans to contract with other producers to use the rest of the pipeline’s capacity. Company President and CEO Terrance Kutryk said he couldn’t disclose whether any other contracts had been signed.

North Dakota is producing just more than 1 billion cubic feet of natural gas per day, 29 percent of which was being flared from 4,659 wells in August, according to the state Pipeline Authority. A task force formed by the North Dakota Petroleum Council to study ways to reduce flaring is expected to present recommendations to the state’s Industrial Commission in January.

Of the 29 percent flared in August, 13 percent of that was flared because of a lack of pipeline connections. The other 16 percent was flared from wells that were connected to gas sales facilities but that face infrastructure challenges such as the need for additional pipeline compression, high-pressure wells being placed on the same network as older low-pressure wells and pipelines simply not being large enough to handle the high volume of gas production.

Pipeline Authority Director Justin Kringstad said the Tioga Lateral Pipeline will provide transmission for natural gas as more wells are connected to gas gathering lines.

“It’s just as important to the gathering to have that second piece of the pie taken care of,” he said.

Petroleum Council President Ron Ness said the pipeline “is not a silver bullet that’s going to solve all of the flaring issues in one day,” but together with other projects, the export capacity “is critical for the long run.”

Alliance spent about $170 million on the pipeline’s construction, which began in October 2012.