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 Oil & Gas Might Follow Allete's Transmission Line Right-of-Way

September 25, 2013 R.T. Dukes

Allete announced plans to turn a 465-mile DC transmission line right-of-way into a shared right-of-way that could be used for pipelines.

Pipelines moving oil, natural gas, petroleum products, water, or carbon were mentioned as possibilities.

The first order of business will be establishing an extension 60 miles west into the producing region of the Williston Basin and the Bakken Shale.

Governor Jack Dalrymple supports the project and the creative solutions it might offer in reducing Bakken flaring.

"The ALLETE Energy Corridor is a breakthrough opportunity to reduce flaring by locating a major natural gas pipeline from the Bakken to eastern markets," Gov. Jack Dalrymple said. "While the corridor would support the transfer of many energy resources, it could also carry carbon dioxide from coal-fired power plants to western North Dakota for use in advanced oil recovery."

“We see the ALLETE Energy Corridor as a comprehensive infrastructure solution in North Dakota that could serve many products and producers across the region,” said ALLETE CEO Alan R. Hodnik. “We value Gov. Dalrymple’s support of our vision and appreciate him bringing it forward to other members of the state’s energy sector.”

Read the full press release at allete.com

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.