Alliance Receives OK for Bakken Natural Gas Pipeline

Alliance Pipeline received regulatory approval for a proposed pipeline that would deliver natural gas from the Bakken Shale formation to the Chicago market, which would reduce the amount of so-called flaring.

The 106.5 million-cubic-feet-a-day Tioga pipeline should be running by mid-2013, Alliance said.

Although new drilling technology has greatly boosted hydrocarbon production in the Bakken, in North Dakota’s Williston Basin, a lack of pipelines has led oil producers to resort to rail cars to move product, and to burn off excess natural gas.

“Moving more Williston Basin gas to market will also help reduce flaring and provide direct environmental and economic benefits to North Dakotans,” Mike McGonagill, senior vice president and chief operating officer for Alliance Pipeline, said Monday.

A natural-gas glut unleashed by the success of hydraulic fracturing has led U.S. energy companies to move drilling rigs to more profitable oil instead. But natural gas production keeps climbing, because there’s some gas associated with most crude extraction.

In the Bakken, about a third of the gas produced in June was burned via flaring, according to the latest information published by the North Dakota Department of Mineral Resources. Flaring the gas is considered both uneconomical and environmentally damaging to the atmosphere.

Although the percentage of natural gas flared in the Bakken should drop as more pipelines and processing plants are built, building the extra infrastructure will take time, said Tim Evans, senior energy analyst at Citi Futures.

“We may be doing well to not just fall further behind,” said Mr. Evans.

SOURCE: http://online.wsj.com/article/SB10000872396390444138104578030271971758576.html

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