Natural gas production could quadruple
WILLISTON -- Natural gas production in the Williston Basin could more than quadruple current levels, pushing North Dakota into a more leading role in supplying the U.S. natural gas market, according to a study released Wednesday.
The report also projects that oil production in the Williston Basin could grow to 1.8 million barrels per day by 2017 and more than 2 million barrels per day by 2025. May production was about 640,000 barrels per day.
The North Dakota Pipeline Authority commissioned the study from Bentek Energy, an energy market analytics company, to get more information about future natural gas production.
Results from the study show that as Bakken and Three Forks wells age, the amount of gas they produce will grow substantially in seven to 10 years.
Justin Kringstad, director of the Pipeline Authority, said that will have a significant impact on the amount of pipelines and other infrastructure needed to handle that amount of natural gas.
"It's exciting," Kringstad said. "There's tremendous potential for additional investments in gas processing and gas transportation."
Lynn Helms, director of Mineral Resources, said this new information means that every Bakken well has an economical lifespan of about 45 years, rather than 29 years as previously thought.
Natural gas from the Bakken formation is unique because it is rich in natural gas liquids, significantly more than what is found in other natural gas production areas, Helms said.
While the price of natural gas is not projected to increase, the natural gas liquids that North Dakota produces have a higher dollar value, although not as high as crude oil, Kringstad said.
"Those natural gas liquids make it very economical to continue the investment," he said.
Propane and ethane are the two natural gas liquids North Dakota produces that are the most valuable, Helms said.
Unlike oil, the only way to ship natural gas to a processing facility is by pipeline. Getting those liquids to market will require significant investment.
North Dakota officials initially estimated it would require $3 billion to $4 billion to build the necessary infrastructure to handle the natural gas, Kringstad said.
Now that investment may need to be as much as $15 billion, Kringstad said.
Officials expect that private industry will look at this study and use it as a planning tool to develop additional pipelines, gas processing plants and other infrastructure.
"There are companies that are looking for the next opportunity," Kringstad said.
The study looked at Bakken and Three Forks wells in the U.S. portion of the Williston Basin, which is primarily North Dakota and eastern Montana, Kringstad said.
North Dakota produced 651 million cubic feet of natural gas per day in April and Montana produced 85 million cubic feet, for a combined total of 736 million cubic feet.
The study projects that the two states will produce 3.1 billion cubic feet of natural gas per day by 2025.
The results also provide a strong outlook for value-added industries utilizing natural gas liquids, such as fertilizer, petrochemical and natural gas-fired electrical generation, Kringstad said.