Reports related to this article:
Project(s): View 7 related projects in PECWeb
Plant(s): View 6 related plants in PECWeb
Released October 22, 2019 | SUGAR LAND
en
Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Crude oil production in the Bakken Shale of North Dakota surpassed production from the Eagle Ford Shale a little over a year ago to become the second largest-producing unconventional formation in the U.S., after the Permian Basin. As Oil & Gas production in the Bakken grew, project spending in the area, mainly for pipelines and midstream plants, has accelerated.
Roughly 1.5 million barrels of oil per day (BBL/d) were extracted from the Bakken Shale last month, according to the Drilling Productivity Report from the U.S. Energy Information Administration (EIA). Production from the Eagle Ford Shale was about 1.4 million BBL/d last month, the report said. In recent years, production from the Bakken has grown more rapidly than production in the Eagle Ford.
Click on the EIA images at right to see crude oil production in the Bakken and Eagle Ford shales.Roughly 1.5 million barrels of oil per day (BBL/d) were extracted from the Bakken Shale last month, according to the Drilling Productivity Report from the U.S. Energy Information Administration (EIA). Production from the Eagle Ford Shale was about 1.4 million BBL/d last month, the report said. In recent years, production from the Bakken has grown more rapidly than production in the Eagle Ford.
That trend is expected to continue: As the EIA predicted earlier this year in its Annual Energy Outlook, "Northern Great Plains production (will continue to grow) into the 2030s, driven by increases in production from the Bakken and Three Forks tight oil plays." But the agency expected production to flatten and decline in the Eagle Ford over the next few years.
Industrial Info is tracking about 55 oil and gas Production, Pipeline and Terminal projects in the Bakken Shale in parts of the Dakotas and Montana, valued at roughly $3.7 billion, that are scheduled to begin construction between January 2019 and December 2020. Eastern Montana is considered to be part of the Bakken/Three Forks formation.
By contrast, only five projects valued at about $800 million were scheduled to kick off construction in the Dakotas and Montana during the prior two-year period, January 2017 to December 2018.
The Eagle Ford Shale is more established than the Bakken. It has lower costs, closer proximity to markets and an existing infrastructure. All of that mitigates the potential impact of sharp price declines, such as those that took place in 2014-2015.
The Eagle Ford Shale still produces more natural gas than the Bakken, and scheduled project spending in the Texas unconventional formation far exceeds what is planned for North Dakota.
As production of crude oil grows in the Bakken, more associated natural gas and natural gas liquids (NGLs) are being produced. The North Dakota newspapers have carried stories about the potential to build petrochemical plants in the state, which would reduce gas flaring and so-called "ethane rejection" triggered by low prices that often make it uneconomic to extract NGLs from the gas stream.
Earlier this year, the North Dakota legislature passed a sales tax exemption for certain natural gas processing facilities needed for the petrochemical industry.
According to a report in the Bismarck Tribune this month, some of North Dakota's agencies are taking steps to bring petrochemical plants to the state. Earlier this year, the North Dakota Department of Commerce invested $200,000 in a new private company, Bakken Midstream (Lincoln, North Dakota), which is working to develop an in-state petrochemical infrastructure so that more of the state's gas and NGLs stay in North Dakota. State officials also have visited petrochemical centers in Alberta to better understand the needs of the industry.
Bakken Midstream seeks to develop a new type of infrastructure to allow the natural gas to be used in the state, its chief executive, Mike Hopkins told the Tribune. "We're really talking about a fundamental change in how the natural gas industry operates in North Dakota," he added.
In a separate article, the Tribune quoted North Dakota Lieutenant Governor Brent Sanford as saying, "What you hear from the companies when you start poking around is there's somewhere between five and 10 companies that are actively looking for projects over the next five to 10 years worldwide." He said the state is talking with a few companies about setting up shop in North Dakota. He acknowledged the state has some challenges in developing a petrochemical industry cluster, mainly the fact that there are no operating petrochemical plants in the state.
Here are some of the largest oil are gas projects that are scheduled to kick off construction in the Bakken Shale between January 2019 and December 2020:
- Keystone XL Grassroot Crude Oil Pipeline Phase IV, a $470 million, 317-mile leg of the $7 billion Keystone XL Pipeline, is scheduled to extend from the Montana/South Dakota border to the South Dakota/Nebraska border. The Keystone XL project remains ensnared in litigation.
- The Liberty Grassroot Crude Oil Pipeline, a joint venture between Phillips 66 (NYSE:PSX) (Houston, Texas) and Bridger Pipeline LLC (Casper, Wyoming). This 1,300-mile, $2 billion proposed pipeline is expected to transport up to 350,000 BBL/d of crude oil from the Bakken and Niobrara formations to Texas. Construction is scheduled to begin early next year and be completed by the end of 2020.
- The Bear Creek Cryogenic Natural Gas Processing Train #2 Plant Expansion, a $205 million project being developed by a unit of ONEOK Incorporated (NYSE:OKE) (Tulsa, Oklahoma), began construction last month. The expansion will be able to process up to 200 million cubic feet per day (MMCF/d) of gas in the Bakken Shale. The facility is expected to be operating early next year.
- The Pembina Crude Oil Pipeline Line 3 Replacement Program is part of the $7 billion Line 3 Replacement project being developed by Enbridge Incorporated (NYSE:ENB) (Calgary, Alberta). This $165 million leg will extend for about 135 miles from Joliette, North Dakota, to the North Dakota/Minnesota line. When complete, the project will be able to transport up to 830,000 BBL/d of light crude, heavy crude and synthetic crude oil.
"If the state is successful in building an in-state petrochemical cluster," Davis continued, "that would fundamentally alter the supply and demand picture for Bakken Shale oil and gas production."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
