North Dakota Pipeline Plans Move Forward

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Researched by Industrial Info Resources (Sugar Land, Texas)--On Tuesday of last week, North Dakota Governor Jack Dalrymple called for the increased construction of more oil and gas pipelines in the state. North Dakota reached crude oil production of more than 1 million barrels per day (BBL/d) in April, and additional pipeline capacity would help broaden markets, reduce the state's excessive natural gas flaring, and decrease truck traffic, said the governor. Government and industry seem to be responding.

On Wednesday, North Dakota regulators gave the go-ahead to Enbridge Energy Partners (NYSE:EEP) (Houston, Texas) to construct the North Dakota section of the $2.6 billion, 618-mile Sandpiper crude oil pipeline, which would carry 225,000 BBL/d of crude from the western part of the state, through Minnesota, to Enbridge's storage terminal in Superior, Wisconsin.

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At the pipeline summit held by Dalrymple, Enterprise Products Partners (NYSE:EPD) (Houston, Texas) unveiled its plans to construct a 1,200-mile pipeline from Stanley, North Dakota, to Cushing, Oklahoma. The project remains in the early planning stages; no final decision has been made about the project by Enterprise's board of directors, leaving a realistic startup date for the pipeline a few years out.

The pipeline would loop through Montana, Wyoming, Colorado and Kansas on its way to Oklahoma, but Brent Secrest, Enterprise's vice president of onshore crude oil, pipelines and terminals, told media that most of the pipeline's capacity would be reserved for North Dakota crude.

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Also last week, Energy Transfer Partners (NYSE:ETP) (Dallas, Texas) announced plans to construct a pipeline from the Bakken Shale to its hub in Patoka, Illinois. In Patoka, the company is planning to construct a grassroot pipeline lateral to feed into an existing compressor station on the Trunkline Pipeline, which Energy Transfer jointly owns with Enbridge and which is being converted from a natural gas to a crude pipeline to carry oil to the U.S. Gulf Coast.

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So, while rail will undoubtedly remain the major means of crude oil transport in North Dakota for the near term, all signs point to increased shipping by pipeline, as the state's crude oil production continues to grow by leaps and bounds.

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