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Oil fields need gas pipelines as well

BISMARCK -- Oil is not the only valuable commodity coming out of the increasing number of wells drilled in northwestern North Dakota.

Along with crude comes associated natural gas and several other heavy hydrocarbons that are worth big bucks, the state's Pipeline Authority director told lawmakers Thursday.

The Bakken Formation wells recently drilled in Williams and Mountraill County have spurred the building and planning of four gas processing plants there, said Mark Makelky. He and other government and energy industry officials updated the Legislature's interim Energy Development and Transmission Committee at the Capitol on Thursday.

The four new gas plants - all roughly between Ray and Stanley - join eight existing plants in the western-most counties that are already processing oil-related natural gas,

So-called gathering lines that collect the gas at the wells and take it to new processing plants are built, but now the challenge is building transmission-size lines to take those products to a place where they can enter major natural gas lines such as the Canadian-originating Alliance Pipeline that enters northwest North Dakota in Renville County and exits in Richland County.

He said that while several companies are planning those gas transmission lines, none are beyond the proposal stage. In the meantime, trucks and rail cars are taking the natural gas and other byproducts to market.

Makelky said other products in addition to natural gas include naturally occurring propane, butane and several others, all of which "absolutely" have great value in the marketplace.

He said there is bound to be an increasing amount of gas byproduct in the coming months because Whiting Petroleum, which has two of the new gas plants, is expecting to drill 50 to 60 more Bakken Formation oil wells in the Sanish and Parshall areas and seven more into the Red River Formation this year.

Other companies building new gas plants, EOG Resources and Nesson Gas Service, are planning to drill a combined 20 or more oil wells in the same Ray-Stanley-Parshall area. EOG has nine rigs drilling now and a 10th is being shipped in. Nesson is planning to keep drilling eight to 10 new wells per year, Makelky said.

That's one reason why North Dakota Petroleum Council President Ron Ness told the legislators that even while crude oil pipelines are already being beefed up to send more North Dakota oil to market, "We're going to need another major outlet for crude oil before we're done (with the current boom)."

Rep. Shirley Meyer, D-Dickinson, said that's why she and some other legislators are pushing to have the state build a new oil refinery. The only refinery in North Dakota is the Mandan Tesoro Refinery. Ness said there is more discussion about expanding and building refineries going on in this part of the country than anywhere else.

He said oil companies are stretching the size of the known oil fields east until they hit the edge of production. A Minot company has moved into eastern Mountraill County, he said.

"Companies are going to try to explore like they did in the (19)50s and (19)80s," he said, a reference to the previous two oil booms in state history.

Janell Cole works for Forum Communications Co., which owns The Dickinson Press.