February 2021, Vol. 248, No. 2
Features
Bakken Facing Challenges in Coming Year
P&GJ Staff Report
Going forward, the Bakken Shale region should continue to provide good opportunities for midstream companies in 2021, though it will face challenges recovering in the wake of the pandemic.
As second-largest field in the United States, Bakken producers continue to deal with pressure to delay bringing back much of the 500,000 bpd of their curbed output, following a court ruling in July that jeopardizes the operation of Energy Transfer’s Dakota Access Pipeline (DAPL), which ships most of the region’s oil.
DAPL links Bakken producers to Midwest and Gulf of Mexico customers, have accounted for 40% to of the shipping to those regions.
Crude oil production in North Dakota is unlikely to bounce back to pre-coronavirus levels until late 2022 due to reduced demand and pressure on investors for anti-fossil fuel forces.
Environmental Information Agency (EIA) data showed North Dakota’s crude oil output had declined by 41.6% by May 2020 to 900,000 bpd from the end of the previous year in response to demand and pricing.
Oil production has since recovered in the region to some extent, holding at about 1.22 MMbpd for December, about 200,000 bpd lower than the previous year.
One indication of reduced production has been the active rig count in the state which fell to 15 for 53 in December-to-December comparisons, according to the state Department of Mineral Resources.
According to the North Dakota Pipeline Authority, 76% of crude oil coming from the Williston Basin is moved by pipeline, rail accounted for 15% of the transportation.
On a positive note, Outrigger Energy II recently completed its Williston Basin midstream facilities project in Williams County, N.D.
It consists of the Bill Sanderson Gas Processing Plant, a 250 MMcf/d cryogenic gas processing plant, and an 80-mile, 20- and 24-inch, rich gas gathering system, originating in eastern Williams County and terminating at the plant.
The entails ethane recovery and rejection capabilities with direct market access to the Northern Border Pipeline system for residue gas and the ONEOK NGL pipeline system for natural gas liquids. The assets are anchored by a long-term gas gathering and processing agreement with XTO Energy, a wholly owned subsidiary of ExxonMobil.
The gathering system can transport over 450 MMcf/d of raw gas volumes and Outrigger plans to expand the plant’s capacity based on producer needs.
“We delivered the project on time – in less than eight months from groundbreaking – for our anchor customer and under budget for our investors,” said Outrigger CEO Dave Keanini, of the project.
While Williston Basin activity levels slowed due to the 2020 crude oil pricing and COVID-19 environments, there is substantial interest from producers to accommodate future drilling plans as crude oil prices near sustainable levels for the Basin, according to Outrigger.
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