Reports related to this article:
Project(s): View 13 related projects in PECWeb
Plant(s): View 9 related plants in PECWeb
Released September 25, 2013 | SUGAR LAND
en
Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Billions of dollars have been invested in recent years to process and transport North Dakota's crude oil, natural gas and natural gas liquids (NGLs), speakers said at a recent Oil & Gas conference in Bismarck, North Dakota. Logistics specialists have been able to plan and build enough outbound transportation infrastructure--pipelines and railroads--to stay ahead of the forecasted production growth in crude oil, natural gas and NGLs for the next few years. The state's natural gas processing capacity is similarly well-geared to current and projected production. The state's NGL processing capacity is tight, but adequate. The energy industry's Achilles' heel in North Dakota, speakers agreed, is a lack of natural gas-gathering capacity, which contributes to the high percentage of natural gas flaring.
North Dakota's crude-oil production is projected to double over the next decade, to about 1.6 million barrels per day (BBL/d), but current and planned pipeline and rail projects should ensure there is adequate take-away capacity, Peter Hill, executive chairman of Triangle Petroleum Corporation (NYSE:PTLM) (Denver, Colorado), told attendees at the Fourth Annual Bakken Infrastructure Finance & Development conference in Bismarck earlier this month. In fact, if all proposed rail and pipeline projects kick-off according to schedule, outbound capacity for crude oil should slightly exceed 2 million BBL/d in 2016.
Jeff Spearman, vice president for oil, gas and chemicals at SAIC Energy, a unit of SAIC Incorporated (NYSE:SAI) (McLean, Virginia), agreed with Hill's projection about North Dakota's future crude-oil takeaway capacity. Having sufficient takeaway capacity is important, he told attendees, because "when takeaway capacity is constrained, Bakken crude oil prices get crushed."
That's not to say adequate takeaway capacity alone will keep Bakken crude-oil prices high, he added. Prices for Bakken crude oil also are shaped by global supply and demand, potential disruptions in crude-oil producing nations, and the continued easing of bottlenecks at the hub in Cushing, Oklahoma, among other things. Speaking of the Bakken formation, Spearman said: "This is a very volatile market, but over the last few years, it has also been a very good market. If you think it's good now, going forward the opportunities will be absolutely terrific."
One reason the Bakken's future is so bright is because companies like Enbridge Incorporated (NYSE:ENB) (Toronto, Ontario), have made sizable investments in recent years to build the infrastructure to treat, store and transport the state's hydrocarbons to market. "Enbridge is moving from a pipeline company to a transportation company," Kelly Wilkins, manager of strategic planning and business development for Enbridge Pipelines of North Dakota, told the Infocast conference.
Wilkins said Enbridge is expanding several crude-oil pipelines to ensure outbound transport capacity stays ahead of North Dakota's production growth. One existing pipeline, Southern Access, will expand in two phases: Phase I, online this time next year, will add 160,000 BBL/d to the existing 400,000 BBL/d, while Phase II, online in early 2015, will add another 640,000 BBL/d, he said.
Wilkins' colleague, Eric Schaeffer, a business development manager, told attendees Enbridge wants to build a new pipeline, Sandpiper, to transport up to 225,000 BBL/d from North Dakota to Clearbrook, Minnesota, and Superior, Wisconsin. This $2.5 billion project, scheduled to be online in early 2016, could be expanded to 475,000 BBL/d if market conditions are favorable, he added.
The Sandpiper project is only one of several large crude-oil pipeline projects under development by Enbridge across North America. Another is the construction of a "twin" for its existing Seaway pipeline from Cushing to the Gulf Coast. A third is the Flanagan South project. A fourth is the proposed Eastern Gulf Coast Access project, which Enbridge hopes to build as a joint venture with Energy Transfer Partners LP (NYSE:ETP) (Dallas, Texas).
Schaeffer said that across North America, Enbridge is investing more than $16 billion in new crude-oil pipeline takeaway projects. "Strong growth in (crude oil) production continues to create opportunities," Schaeffer said. "Crude price differentials (between markets) support significant infrastructure. We are developing key projects to connect supply to new markets. Our long-term focus is to provide superior access to premium markets across North America."
Enbridge also is expanding its rail and storage capacity in North Dakota, Schaeffer continued. The company's Berthold Rail Project, which opened this year, connects with a Burlington Northern Santa Fe mainline. Current capacity of 80,000 BBL/d could be increased by 40,000 BBL/d. And the company's crude-oil storage capacity in North Dakota is scheduled to jump from 300,000 barrels this year to 1.5 million barrels by the end of 2015, Schaeffer said.
While recognizing the admirable amount of logistical work that has taken place in North Dakota, speakers also acknowledged that there was a mismatch between North Dakota's natural gas production and the gathering systems that bring that gas to processing facilities. An inadequate gathering system is on reason an estimated 30% of all natural gas produced in the state is flared--there's simply no way to connect the wells to processing facilities or pipelines.
"The industry has spent over $4 billion over the last few years building gas processing capacity," remarked Triangle's Hill. "What's not in place is the gas gathering network--a system that links the well pad to the processing plant. That's why so much gas is being flared."
"People are building the (natural gas) network as fast as they can, but the problem is local gathering systems," said Justin Kringstad, director of the North Dakota Pipeline Authority (Bismarck, North Dakota). "The pace of development has been blistering, but landowners are getting fatigued from all the phone calls and door knocks" they receive from industry officials seeking easements across their property. "Some landowners get a pitch every day. Our No. 1 priority is to strengthen relations with landowners and overcome landowner fatigue," which he hoped would lead to a surge in construction of gas gathering systems.
View Plant Profile - 1071501 3101339 3101245 3101245 1071029 1039196 3007824 3013665 1071029 1083833 1083837 1083841
View Project Report - 300099105 300134833 300134720 300134730 32000279 300121809 300013504 300020041 300040907 32000278 32000290 32000291 32000292
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine 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.
North Dakota's crude-oil production is projected to double over the next decade, to about 1.6 million barrels per day (BBL/d), but current and planned pipeline and rail projects should ensure there is adequate take-away capacity, Peter Hill, executive chairman of Triangle Petroleum Corporation (NYSE:PTLM) (Denver, Colorado), told attendees at the Fourth Annual Bakken Infrastructure Finance & Development conference in Bismarck earlier this month. In fact, if all proposed rail and pipeline projects kick-off according to schedule, outbound capacity for crude oil should slightly exceed 2 million BBL/d in 2016.
Jeff Spearman, vice president for oil, gas and chemicals at SAIC Energy, a unit of SAIC Incorporated (NYSE:SAI) (McLean, Virginia), agreed with Hill's projection about North Dakota's future crude-oil takeaway capacity. Having sufficient takeaway capacity is important, he told attendees, because "when takeaway capacity is constrained, Bakken crude oil prices get crushed."
That's not to say adequate takeaway capacity alone will keep Bakken crude-oil prices high, he added. Prices for Bakken crude oil also are shaped by global supply and demand, potential disruptions in crude-oil producing nations, and the continued easing of bottlenecks at the hub in Cushing, Oklahoma, among other things. Speaking of the Bakken formation, Spearman said: "This is a very volatile market, but over the last few years, it has also been a very good market. If you think it's good now, going forward the opportunities will be absolutely terrific."
One reason the Bakken's future is so bright is because companies like Enbridge Incorporated (NYSE:ENB) (Toronto, Ontario), have made sizable investments in recent years to build the infrastructure to treat, store and transport the state's hydrocarbons to market. "Enbridge is moving from a pipeline company to a transportation company," Kelly Wilkins, manager of strategic planning and business development for Enbridge Pipelines of North Dakota, told the Infocast conference.
Wilkins said Enbridge is expanding several crude-oil pipelines to ensure outbound transport capacity stays ahead of North Dakota's production growth. One existing pipeline, Southern Access, will expand in two phases: Phase I, online this time next year, will add 160,000 BBL/d to the existing 400,000 BBL/d, while Phase II, online in early 2015, will add another 640,000 BBL/d, he said.
Wilkins' colleague, Eric Schaeffer, a business development manager, told attendees Enbridge wants to build a new pipeline, Sandpiper, to transport up to 225,000 BBL/d from North Dakota to Clearbrook, Minnesota, and Superior, Wisconsin. This $2.5 billion project, scheduled to be online in early 2016, could be expanded to 475,000 BBL/d if market conditions are favorable, he added.
The Sandpiper project is only one of several large crude-oil pipeline projects under development by Enbridge across North America. Another is the construction of a "twin" for its existing Seaway pipeline from Cushing to the Gulf Coast. A third is the Flanagan South project. A fourth is the proposed Eastern Gulf Coast Access project, which Enbridge hopes to build as a joint venture with Energy Transfer Partners LP (NYSE:ETP) (Dallas, Texas).
Schaeffer said that across North America, Enbridge is investing more than $16 billion in new crude-oil pipeline takeaway projects. "Strong growth in (crude oil) production continues to create opportunities," Schaeffer said. "Crude price differentials (between markets) support significant infrastructure. We are developing key projects to connect supply to new markets. Our long-term focus is to provide superior access to premium markets across North America."
Enbridge also is expanding its rail and storage capacity in North Dakota, Schaeffer continued. The company's Berthold Rail Project, which opened this year, connects with a Burlington Northern Santa Fe mainline. Current capacity of 80,000 BBL/d could be increased by 40,000 BBL/d. And the company's crude-oil storage capacity in North Dakota is scheduled to jump from 300,000 barrels this year to 1.5 million barrels by the end of 2015, Schaeffer said.
While recognizing the admirable amount of logistical work that has taken place in North Dakota, speakers also acknowledged that there was a mismatch between North Dakota's natural gas production and the gathering systems that bring that gas to processing facilities. An inadequate gathering system is on reason an estimated 30% of all natural gas produced in the state is flared--there's simply no way to connect the wells to processing facilities or pipelines.
"The industry has spent over $4 billion over the last few years building gas processing capacity," remarked Triangle's Hill. "What's not in place is the gas gathering network--a system that links the well pad to the processing plant. That's why so much gas is being flared."
"People are building the (natural gas) network as fast as they can, but the problem is local gathering systems," said Justin Kringstad, director of the North Dakota Pipeline Authority (Bismarck, North Dakota). "The pace of development has been blistering, but landowners are getting fatigued from all the phone calls and door knocks" they receive from industry officials seeking easements across their property. "Some landowners get a pitch every day. Our No. 1 priority is to strengthen relations with landowners and overcome landowner fatigue," which he hoped would lead to a surge in construction of gas gathering systems.
View Plant Profile - 1071501 3101339 3101245 3101245 1071029 1039196 3007824 3013665 1071029 1083833 1083837 1083841
View Project Report - 300099105 300134833 300134720 300134730 32000279 300121809 300013504 300020041 300040907 32000278 32000290 32000291 32000292
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine 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.
