Tag Archives: bakken shale

Enbridge Energy applies to build pipeline from North Dakota

Enbridge Energy has applied to build the largest oil pipeline yet from western North Dakota’s booming oil patch and will soon begin courting oil producers to reserve space, a key step in a $2.6 billion project that would move millions of gallons of oil to Minnesota and Superior, Wis.

Enbridge Energy, based in Calgary, Alberta, is proposing the 612-mile Sandpiper pipeline to carry 225,000 barrels of oil each day to a hub in northern Minnesota and 375,000 barrels to one in northwestern Wisconsin. If approved by regulators, it would be the largest pipeline moving oil out of North Dakota, the nation’s second-leading producer of oil behind Texas.

North Dakota has more than doubled its oil production in the past two years, closing in on a million barrels of oil a day. But because of the lack of pipeline capacity in the state, about 60% of the state’s daily oil production is being shipped by rail. A barrel is equivalent to 42 gallons.

Enbridge Energy comments that the project is “needed and in the public interest.”

Oil shipped to Superior would be shipped through Wisconsin on a network of pipelines already in place. Enbridge Energy has proposed an expansion that would not add pipe in the state, but would expand pump stations to allow more oil to flow through the Wisconsin pipelines.

The pipeline is the biggest project yet to come before North Dakota regulators to move oil from the rich Bakken and Three Forks formations in the western part of the state, said Brian Kalk, who heads the North Dakota Public Service Commission. The three-member commission oversees a slew of public interests, from pipelines to grain elevators, though much of its recent work has involved the oil and natural gas industry.

A spokesperson for Enbridge Energy said the new pipeline would provide “a timely, cost effective and long-term transportation solution, thereby serving the public’s interest in improved access to an abundant, secure, and reliable crude oil supply to satisfy consumers’ demand for refined products.”

Kalk said the commission is reviewing the application and that at least three public hearings will be held in communities along the pipeline’s proposed route in North Dakota.

If it is approved, the two-phase expansion project for Wisconsin entails construction or upgrades at 13 Wisconsin pumping stations, along with three in Illinois, that would permit the pipeline from Superior to Illinois to triple its capacity to 1.2 million barrels a day from 400,000 barrels a day.

Enbridge Energy operates about 50,000 miles of pipelines in North America, and several hundred miles of pipelines in North Dakota, including one that runs between Minot, N.D., and Clearbrook, Minn. The line, built in 1962, has the capacity to ship 210,000 barrels of North Dakota crude daily, or about 8.8 million gallons.

SOURCE: http://www.jsonline.com/business/canadian-firm-applies-to-build-pipeline-from-north-dakota-to-superior-b99135995z1-230738391.html

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

TransCanada to Build Texas Segment of Keystone XL Pipeline

TransCanada Corp. will proceed with building a $2.3 billion segment of its Keystone XL oil pipeline from Oklahoma to the Texas coast so that it isn’t delayed by U.S. approval for the rest of the line.

The company, based in Calgary, expects the segment to begin carrying crude from the Cushing, Oklahoma, storage hub to refineries on the U.S. Gulf Coast as soon as mid-year 2013, according to a statement today. TransCanada is separating the Cushing line from its application to President Barack Obama for approval of a Keystone expansion that will bring crude into the U.S. from Canada’s oil sands.

“We remain committed to building this overall project in a timely and efficient manner and to meet demand of shippers,” said TransCanada Chief Executive Officer Russ Girling in an interview today. Shippers are making multi billion dollar commitments spanning decades and “they haven’t wavered from Keystone,” he said.

As originally envisioned, Keystone XL would have carried as much as 830,000 barrels of oil a day from Alberta, Canada, and the Bakken Shale formation in North Dakota and Montana along a 1,661-mile (2,673-kilometer) path to Texas refineries. The full $7.6 billion Keystone pipeline needed a permit from the State Department because it crossed the U.S.-Canada border.

Obama’s Keystone Rejection

Obama rejected Keystone XL in January based on concerns the pipeline might pollute drinking water resources in Nebraska. Obama said a Congressional deadline left him too little time to consider the revised route through Nebraska that the company accepted in November.

As a stand-alone project, the Cushing segment will not need approval from the State Department. The pipeline will help relieve oversupplies that have accumulated in the U.S. Midwest because of a lack of pipeline capacity to carry the oil to refineries on the coast.

Cushing is the delivery point for crude oil traded on the New York Mercantile Exchange. A lack of pipeline capacity between Cushing and the Gulf Coast, where most refineries are located, has caused U.S. oil to trade at a discount to imports.

Obama’s administration supports TransCanada’s plan to build the Oklahoma-to-Texas segment separately.

“Moving oil from the Midwest to the world-class, state-of- the-art refineries on the Gulf Coast will modernize our infrastructure, create jobs, and encourage American energy production,” White House Press Secretary Jay Carney said in a statement today.

‘Near Future’

TransCanada will apply for a permit “in the near future” to build the section from the U.S.-Canada border to Steele City, Nebraska, according to the statement. The company may alter the route in Nebraska, the company said in the statement.

Proceeding with the Cushing section of the line will allow TransCanada to realize income from the pipeline before the full project is built, said Steven Paget, an analyst with FirstEnergy Capital Corp. in Calgary.

“The Gulf Coast Project will transport growing supplies of U.S. crude oil to meet refinery demand in Texas,” Girling said in the statement. “Gulf Coast refineries can then access lower- cost domestic production and avoid paying a premium to foreign oil producers.”

Environmental groups remain opposed to all sections of the pipeline because of concerns about the potential environmental impact of tar-like bitumen known as oil-sands crude.

‘National Interest’

“Whether in pieces or as a whole, the Keystone XL tar sands pipeline is not in the national interest,” Susan Casey- Lefkowitz, director of international programs for the New York- based National Resources Defense Council, wrote in a comment published on the environmental organization’s website. “Raw tar-sands oil going from the Midwest to the Gulf for refining means serious pipeline safety issues for landowners.”

Enbridge Inc. and Enterprise Products Partners LP are preparing to reverse the Seaway pipeline between Cushing and Houston, which will also help alleviate the glut at Cushing. Seaway will be able to carry 150,000 barrels by June 1, and will be expanded to 400,000 barrels by early 2013, the companies have said.

FirstEnergy’s Paget said there’s room for both pipelines, since oil production is growing in the U.S. Also, the full Keystone pipeline will eventually bring much more oil to Cushing, he said.

“The Seaway line’s contracts are independent of Keystone,” said Paget, who rates TransCanada’s shares“market perform” and owns none. “I’m not saying both lines will be full.”

SOURCE: http://www.businessweek.com/news/2012-02-28/transcanada-to-build-texas-segment-of-keystone-xl-pipeline.html