Bakken Shale Development Sees Small Players Doing Big Things

Researched by Industrial Info Resources (Sugar Land, Texas)--The Bakken shale has sparked an enormous buzz of activity in North Dakota as oil producers and midstream companies vie to capitalize on the huge reserves under the state's rolling hills. As expected, the big players like Enbridge Incorporated (ENB) (Calgary, Canada) are investing heavily. However, smaller companies, many privately owned or joint ventures have sprung up and are investing their time and resources in developing new infrastructure to transport or process Bakken crude oil.

IIR is currently tracking roughly $5 Billion in Bakken-related crude oil development in Montana, North Dakota, Colorado, and Wyoming. Of that total, over $1 billion is tied up in Enbridge's Sandpiper pipeline project, which will provide almost a quarter million barrels per day (b/d) of takeaway capacity by the end of 2015. The remaining $4 billion in development is almost entirely made up of smaller players, many of which are based in Houston, Texas. One exception to the rule of smaller players is the Pony Express Pipeline conversion. Originally owned by Kinder Morgan Incorporated (KMI) (Houston), it was sold to Tallgrass Energy Partners (TEP) (Overland Park, KS) last summer. The Pony Express represents over half a billion dollars in investment.

Among the smaller players entering into the area, one of two of note is a private equity firm, Quintana Capital Group (Houston) that is building 144 miles of pipe from Beaver Lodge to the Fryburg area dubbed the Bakken Link pipeline. Quintana is investing over $120 million in this venture. The other is Thunder Butte Petroleum Services (Parshall, ND) (TBPS), which is actually an arm of the Three Affiliated Tribes of Mandan, Hidatsa, and Arikara Nation. TBPS is investing nearly half a billion dollars into developing a new refinery in the area capable of refining 20,000 b/d from local producers. These players are not only smaller, but also unconventional participants in exploiting a new oil field.

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