FRIDAY, JANUARY 12, 2018
A new 900-mile natural gas liquids pipeline proposed by Oklahoma-based energy company ONEOK could start moving product from Montana, near the North Dakota Bakken shale play, to Bushton, Kansas, via eastern Wyoming and northeast Colorado.
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| Image courtesy of ONEOK |
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The proposed Elk Creek pipeline (shown as a dashed line here) would move natural gas liquids from Montana, near North Dakota's Bakken shale play, to Kansas. |
The Elk Creek pipeline, announced by the company on Jan. 4, would cost $1.4 billion to build and would move 240,000 barrels per day of NGLs. ONEOK says its Bakken NGL pipeline—originating in North Dakota and running to Colorado—and the Overland Pass Pipeline, which connects with Bakken NGL in Colorado and moves product to Kansas, are at capacity. Overland Pass is co-owned by ONEOK and Williams Pipeline Partners.
The new pipeline would largely follow the rights-of-way of those two pipelines.
Limiting Flaring
“Additional NGL takeaway capacity is critical to meeting the needs of producers who are increasing production and are required to meet natural gas capture targets in the Williston Basin," said Terry K. Spencer, ONEOK president and CEO.
For a number of reasons, including limited transport capacity, oil and gas producers often “flare,” or burn off, a portion of the resources they recover from drilling—usually natural gas. Regulators have set up mandatory capture rates in an attempt to reduce the amount of oil and gas resources being flared off; in North Dakota, producers must capture 85 percent of what is produced or face possible regulatory restrictions.
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| © iStock.com / HHakim |
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The new pipeline would expand capacity to move natural gas liquids from the Bakken shale region, reducing the need to flare excess resources. |
In September and October, the most recent months on record, North Dakota natural gas producers failed to meet the 85 percent goal overall, flaring about 15.5 percent of all natural gas produced in the state both months. As Fox Business reports, 13 producers failed to meet the capture goal in September, but few faced sanctions as a result.
The North Dakota natural-gas capture goal will increase from 85 percent to 88 percent in November, and again to 91 percent two years later.
Pipeline vs. Rail
In addition to the issue of flaring, limited pipeline capacity can lead to product being moved via methods that are arguably less safe. According to the Bismarck Tribune, the pipeline capacity issue means that right now, 40,000 to 60,000 barrels per day of NGLs produced in North Dakota are transported by rail.
While ONEOK says the pipeline could be up and running by the end of 2019, the plan is still subject to state and federal regulatory approvals.
Tagged categories: Oil and Gas; Pipelines; Program/Project Management
