BISMARCK, N.D. (AP) — Federal regulators have approved a natural gas pipeline in western North Dakota, a move state officials believe will help curb the wasteful flaring of excess gas and increase state tax revenues by millions of dollars annually by allowing more oil drilling in the area.
Federal Energy Regulatory Commission officials this week approved a certificate of public convenience and necessity for WBI Energy Inc.’s North Bakken Expansion project.
The company, a subsidiary of Bismarck-based MDU Resources Group Inc. said the expansion would add 250 million cubic feet of natural gas per day to a pipeline network.
The company said the project includes construction of about 62 miles beginning in Tioga of 24-inch natural gas pipeline and 20 miles of 12-inch pipe, a new compressor station and additional infrastructure. The company said the project would cost $260 million and employ up to 450 people during construction.
The line would connect to the Northern Border Pipeline south of Watford City, where the gas would be sent to Iowa, Chicago and other markets, Kringstad said.
Natural gas, a byproduct of oil production, is far less valuable than crude. Natural gas production grew by 6% in March to 2.879 billion cubic feet per day. The industry captured 94% of the gas it produced and is meeting the 91% target set by state regulators to help alleviate the wasteful flaring of excess gas.
The state’s daily oil output in March, the latest figures available, increased 2% to 1.108 million barrels per day.
Kringstad said oil drilling in the area north of Lake Sakakawea is hamstrung by the lack of natural gas infrastructure.
“If a new gas transmission project was not developed, the region north of the lake would continue to see depressed activity levels since the gas capture infrastructure is not available to meet the flaring guidelines,” Kringstad said.
“By bringing this system online, it frees up the ability for more drilling and associated oil and gas production north of Lake Sakakawea,” Kringstad said. “For every day this system is operating at its starting capacity, North Dakota’s oil tax revenue increases by over a $1 million per day.”
