MDU Resources' Natural Gas "Dakota Pipeline" Update - March 2014

March 28, 2014 Kirk Eggleston

Bakken Natural Gas Pipeline to Minnesota - WBI Energy

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.

“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.”

— Dave Goodin, MDU's CEO

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.

Bakken Natural Gas Pipeline To Minnesota - WBI Energy

June 3, 2013 R.T. Dukes

MDU Resources' WBI Energy plans to build a $650-700 million, 400-mile pipeline from the Bakken to markets in eastern North Dakota, Minnesota, and Wisconsin.

The pipeline will stretch from western North Dakota to western Minnesota and will tie into Viking Gas Transmission's pipeline system. The Viking system will allow gas to move into markets in Wisconsin.

“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, CEO of MDU Resources. “Through interconnecting pipelines, the proposed pipeline could also serve Minnesota, Wisconsin and Midwest U.S. markets.”

Planned capacity is 400 mmcfd, but it could be expanded to 500 mmcfd if user commitments warrant the change. The pipeline will include 400 miles of 24-inch pipe, at an estimated construction cost of $650-700 million.

Steven L. Bietz, president and CEO of WBI Energy. "This project would be the largest single pipeline construction project in our company history. This project, combined with other recent and ongoing projects, would bring our total Bakken-related investment to nearly $1 billion."

An open season for the pipeline will start late this summer and construction is expected to start in early 2016.

Dakota Prairie Refinery Groundbreaking - MDU Resources

March 28, 2013 R.T. Dukes

Dakota Prairie Refinery Groudbreaking Governor Dalrymple

A partnership between MDU Resources and Calumet Specialty Product Partners broke ground on the Dakota Prairie Refinery on Tuesday.

The 318-are site where the refinery will be built sits just west of Dickinson in Stark County, ND. Construction is expected to take less than two years and will employ 400-500 people at the peak. Ongoing operations will employ approximately 100 people. Those are stable Bakken Jobs that will be around for decades to come. Hiring and training of operating personnel is expected to begin in 2013.

"Bringing this project from concept to construction took the effort of a great many people," said David L. Goodin, president and chief executive officer of MDU Resources. "We especially appreciate the support of Governor Dalrymple, other state officials and state agencies. Their permitting process was rigorous, but at the same time they helped us identify and solve problems that are involved in a complex project such as this."

The refinery will have the capacity to process 20,000 b/d of local crude oil and will primary produce diesel. Diesel is in high demand in North Dakota and the state is challenged with a surplus of crude and a shortage of refined products. This plant will help meet strong local demand.