Your online source for western North Dakota and oil news
Published February 15, 2012, 11:50 PM

New pipeline proposed across North Dakota

A western Colorado firm announced plans this week to build a pipeline across North Dakota from the Oil Patch past Devils Lake and Grand Forks to the big market hub near Clearbrook, Minn., by late 2013.

By: Stephen J. Lee, Grand Forks Herald

A western Colorado firm announced plans this week to build a pipeline across North Dakota from the Oil Patch past Devils Lake and Grand Forks to the big market hub near Clearbrook, Minn., by late 2013.

The proposed pipeline could carry more than a fourth of current crude production in the state, reducing truck traffic in the Williston Basin, a company official said.

Saddle Butte Pipeline was formed in 2008 by a group of experienced oil pipeline managers wanting in on the basin’s burgeoning Bakken boom, said Greg Ward, vice president and general counsel for the Durango, Colo., firm.

Instead of producing oil, Saddle Butte is a “mid-stream” firm that builds infrastructure to move oil and gas from well to market, he said.

The proposed pipeline would be built by its subsidiary, High Prairie Pipeline, which already owns and operates 200 miles of pipeline gathering natural gas and crude oil in McKenzie and Dunn counties, as well as a gas processing plant near Watford City and crude oil terminals in Alexander and Johnson’s Corner.

Now the idea is to build a 450-mile pipeline from Alexander, south of Williston, to Clearbrook, north of Bagley, where Canada’s Enbridge already has pipelines coming in from the north and west, shipping petroleum to major markets through Duluth to Chicago and points east and south.

Enbridge has a major pipeline corridor from Williston to Clearbrook, roughly following U.S. Highway 2, several miles north of High Prairie’s proposed route.

More capacity

On Tuesday, High Prairie launched a “binding open season,” seeking investors and shippers to buy into its plan.

The preliminary plan shows the pipeline running straight east about 450 miles from just north of Alexander, past Watford City, across the northwest end of Lake Sakakawea, south of Devils Lake and across southern Grand Forks County, passing near Thompson, going under the Red River and ending in Clearbrook.

The 16-inch pipeline would be able to move 150,000 barrels of crude per day out of the Williston Basin, Ward said, which is equivalent to about 28 percent of the 534,000 barrels being pumped out of the ground every day in December from the state’s Oil Patch.

The state’s production is expected to eclipse 600,000 barrels a day later this year, making North Dakota the nation’s second-largest oil producer behind Texas, which produces about 1.1 million barrels a day.

State officials say there is enough transportation capacity to handle North Dakota’s crude oil output for the next two years or so, using existing pipelines and, increasingly, trucks and rail cars. But more shipping capacity is needed beyond that.

Regulatory steps

High Prairie can’t begin to seek easements and state approval until after March 16, which is the end of “open season,” allowing public bidding for such a common carrier pipeline, Ward said.

The capacity and the route of the pipeline could be adjusted, he said, depending on the response to the company’s proposals, he said.

Ward said he hopes High Prairie can take advantage of existing easements for power lines, roads and existing pipelines and have the new pipeline operating by late 2013.

Despite political opposition to the Keystone XL pipeline being proposed from western Canada through eastern Montana and South Dakota and Nebraska, he said he thinks High Prairie’s plan can gain public and governmental approval.

The Keystone pipeline would transport high-sulfur, or “sour,” crude from Canadian oil-sands, but North Dakota’s Bakken crude is a much “sweeter” product that raises less concern among environmentalists, he said. “We think this is a very different project.”

High Prairie’s pipeline also would ship U.S. oil to U.S. markets, he said, helping decrease the nation’s reliance on imported oil and pumping up the domestic economy.

Reach Lee at (701) 780-1237; (800) 477-6572, ext. 237; or email slee@gfherald.com.

Tags: