Bakken Pipeline & Midstream News

Summit Midstream Expanding Bakken System – $300 Million

Includes Four Projects Across Williams and Divide Counties

Summit Midstream Partners announced in June of 2014 that it will spend $300 million on four new development projects involving oil, water and natural gas gathering in the Bakken Shale play.

The new projects will further expand the companies footprint in Williams and Divide counties. In June of 2013, Summit announced plans to spend $60 million on development projects in North Dakota.

Read more: Summit Midstream Expanding Bakken System in Williams and Divide Counties

One of the Summit’s new projects is geared towards providing customers with additional crude oil interconnects. Meadowlark, a wholly owned operating subsidiary of Summit, will construct a new crude oil truck unloading station. With this project, Meadowlark will provide its customers with a new interconnect for up to 50,000 b/d of crude oil deliverability, providing access to new downstream markets on both the East and West Coasts.

“We expect our new organic development projects will further enhance Summit’s position as a leading, independent midstream provider in the Bakken Shale,” said CEO Steve Newby.

Another of the company’s recently announced projects is a new 240 mile pipeline, which officials say will reduce flaring in North Dakota, as the pipeline gathers natural gas in a remote area currently lacking in infrastructure. The pipeline will be constructed by Tioga Midstream, a subsidiary of Summit Midstream. When it is completed, it is expected to have a total system capacity of 20,000 b/d of crude oil, 25,000 b/d of water, and 14 million cf/d of associated natural gas. The project is supported by a 10 year agreement with an acreage dedication of 114,000 acres.


Worthington Industries Acquires Tank Storage Division of Steffes Corporation in North Dakota

Steffes Corporation Generated 25 Million in Revenue in 2013
Bakken Oilfield StorageTanks

Bakken Oilfield Storage Tanks | Click to Enlarge

Worthington Industries expands its reach in the Bakken, purchasing the tank storage manufacturing division of Steffes Corporation for an undisclosed amount in late March 2014. Steffes Corporation manufactures oilfield and salt water storage tanks for clients in the Bakken Shale and Williston Basin, and generated $25-million in revenue in 2013. Worthington will acquire Steffes Corporation’s Dickinson, N.D. plant in the deal, which currently employs 35 people.

[Read more...]

MDU Resources’ Natural Gas “Dakota Pipeline” Update – March 2014

Open Season For Pipeline Ends May 30th
Bakken Natural Gas Pipeline to Minnesota - WBI Energy

Bakken Natural Gas Pipeline to Minnesota – WBI Energy | Click to Enlarge

The open season for MDU Resources’ natural gas “Dakota Pipeline” will end on May 30th, but the project may not have any legs. In a Reuters report, company officials indicated at a New Orleans energy conference in March that they are currently lacking enough binding commitments for the project. The company began it’s open season on January 30th for the $650 – $700 million project, which is intended to transport natural gas through North Dakota to interconnection points in Northwestern Minnesota.

Read more: WBI Energy’s Bakken Natural Gas Pipeline Enters Open Season

Dave Goodin, MDU’s CEO, told Reuters, “we’re encouraged by the reaction of the marketplace, but I’d be getting ahead of myself if I said we’re ready to build. We need some binding commitments.”

WBI Energy, a subsidiary of MDU Resources, revealed in a press release in January that construction on the proposed pipeline could begin in 2016, with a completion date of 2017. Despite the lack of current commitments, Goodin is encouraged about the pipeline, but admits in the Reuter’s report that the challenge is for the marketplace to see that far in advance. The natural gas rig count in the Bakken has held flat at -0- for some time, and the price of natural gas since the beginning of 2014 has hovered between $4 – $6/mmbtu.

The pipeline makes sense for the region from a flaring standpoint according to the North Dakota Industrial Commission (NDIC). Currently, ~30% of all natural gas produced in the state is flared, and without effective infrastructure in-place, no other economically viable choice exists for companies targeting the oil rich Bakken Shale.


Hess To Begin Selling Bakken Natural Gas from Tioga Plant

Winter Weather Delayed Plant Expansion According to Company Officials
Hess' Bakken Acreage Map

Hess’ Bakken Acreage Map

Hess announced in March 2014 that it will begin selling natural gas from its Tioga, North Dakota, plant. According to the company, expansion plans for the plant have been delayed due to poor weather conditions.

In a Reuters article, Hess spokesman, John Roper, said, “due to the unusually harsh winter weather, we’re slightly behind our initial plans, but we expect to start selling residue gas this month.”

The recent upgrade to the Tioga plant includes additions to ethane recovery, full fractionation and sales of natural gas liquids, according to Hess filings with the U.S. Securities and Exchange Commission. At the beginning of the year, the company earmarked $350 million for the expansion of the plant.

According to the North Dakota Industrial Commission (NDIC), in the first part of this year, ~100 wells in North Dakota had to be shut down to reduce flaring. In the liquids-rich Bakken Shale, that resulted in an impact on oil production. The Hess plant expansion could help alleviate the flaring issue, and bring some of the wells back online. The company is hoping to meet revised production estimates of 250M cf/day over the next 12-24 months.

North Dakota’s oil production rose by about 6,500 b/d to about 935,000 bpd in January 2014, Department of Mineral Resources data showed last week. Output in December dropped by 50,000 bpd from the month before.

Hess Tioga, North Dakota Plant Expansion Highlights

  • Hess announced that it would begin selling natural gas from its Tioga, North Dakota plant in March 2014
  • Weather delayed the expansion
  • Hess planning to meet revised production estimates of 250M cf/day over the next 12-24 months

WBI Energy’s Bakken Natural Gas Pipeline Enters Open Season – Dakota Pipeline

$675 million to be spent on 375 mile gas pipeline to Minnesota
WBI Dakota Pipeline

WBI Dakota Pipeline | Click to Enlarge

The open season to secure commitments for WBI Energy’s natural gas “Dakota Pipeline” began on January 30th.

WBI Energy, a subsidiary of MDU Resources, announced plans to build a 400 mile natural gas pipeline at an estimated cost between $650 – 700 million dollars in June 2013. Costs for the project will remain at $650 million, but only cover 375 miles, shaving off 25 miles of pipeline.

[Read more...]

Hess Capital Budget for 2014 Flat in Bakken at $2.2 Billion

Nearly 40% of the Corporate Budget Will Be Spent in the Bakken
Hess' Bakken Acreage Map

Hess’ Bakken Acreage Map

Hess plans on committing nearly half of its $5.8 billion capital budget to unconventional shale resources in 2014, with $2.2 billion slated for development of the Bakken. That’s the same figure Hess earmarked for development spending in the formation for 2013, but the company’s strategic focus is slightly different this year as shale costs shrink.

[Read more...]

Are More Pipelines and Rail Safety Measures Needed in Bakken? – Senator John Hoeven – Video

More Oil Will Move to Rail If Pipelines Are Not Built

As North Dakota approaches the 1-million barrel per day mark, infrastructure for transporting the oil remains a significant concern, with pipelines being one obvious solution.

Concerns sparked by train derailments have also contributed to the need increased safety measures. [Read more...]

Koch Cancels Proposed Bakken Pipeline – Dakota Express Pipeline

Without Adequate Pipeline Infrastructure, Rail is Here to Stay
Bakken Pipeline Map

Bakken Pipeline Map | Click to Enlarge

The “Dakota Express Pipeline”, proposed in June 2013 by Koch Pipeline, will not be built according to a Bloomberg report. The project included a 250,000 b/d pipeline to transport oil out of the Bakken in Western North Dakota to receipt points in Illinois.

Read more: Koch Plans Open Season for Bakken Crude Pipeline to Illinois [Read more...]

ND Defines Stricter Rules for Pipeline Construction & Stripper Well Exemptions

Rules Aim to Improve Pipeline Safety & Minimize Tax Exemptions on Recompleted Wells

A number of changes to the North Dakota Administrative Code could impact pipeline development and stripper wells in 2014. Approved by the North Dakota Industrial Commission last month, forty-seven (47) new rules were proposed, bringing the number of rules for oil and gas operations to seventy (70).

According to the Department of Mineral Resources, a division of the Industrial Commission, the changes could take place as early as April 1, 2014. One particular area of the code, 43-02-03-29, addresses pipeline development in the region: [Read more...]

Is Bakken Oil More Flammable?

Light-Sweet Crude Is Flammable Like Gasoline
Plains Crude By Rail Costs

Plains All American Rail Costs | Click to Enlarge

Bakken oil is produced at a high quality that makes it easier to refine into commercial products and makes it easier to ignite.

There is nothing new about oil being flammable. The science has been the same for well….forever. At a point a few decades ago, light-sweet crude (WTI) was the dominate oil quality in the U.S.

Light oil production growth in the Bakken, Eagle Ford, and Permian isn’t something the industry has never seen or handled, but it is an unforeseen boom bigger than anyone expected. [Read more...]