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ONEOK proposes $280M gas processing plant near Watford City: Plant would be state’s second largest; public hearing set for June 18

BISMARCK – The North Dakota Public Service Commission has scheduled a June 18 public hearing for a proposed $280 million natural gas processing plant near Watford City that PSC Chairman Brian Kalk said will play an important role in efforts to reduce flaring.

The Lonesome Creek Plant proposed by ONEOK Rockies Midstream LLC would process up to 200 million cubic feet of natural gas per day, making it the state’s second largest gas processing plant behind Hess Corp.’s plant at Tioga, which was recently expanded from 115 million cubic feet per day to 250 million cubic feet per day.

The volume of natural gas flared in the state during February was 10.95 billion cubic feet, or about 391 million cubic feet per day.

ONEOK’s plant would raise the company’s total processing capacity in North Dakota to 800 million cubic feet per day, said Danette Welsh, governmental affairs manager for ONEOK.

The company filed its application for a certificate of site compatibility on April 21. Kalk said the commission fast-tracked the scheduling of the June 18 public hearing in Watford City.

“Every case is important, but particularly as we’re trying to stop the flaring issues,” Kalk said Thursday during a special PSC meeting to schedule the hearing.

The percentage of natural gas flared in North Dakota was 36 percent in February, tying the historical high set in September 2011. Department of Mineral Resources Director Lynn Helms projected earlier this month that flaring would drop by 10 to 15 percentage points when the Hess plant in Tioga, which was temporarily offline during the expansion, became fully operational.

The Hess plant restarted at the end of March and is now fully operational, processing about 140 million cubic feet per day, Hess spokesman John Roper said by email Thursday. He said Hess is working to reach capacity of 250 million cubic feet per day as quickly as possible, and its aim is to eventually increase capacity to 300 million cubic feet per day or higher.

ONEOK’s plant would occupy about half of a 160-acre site 13 miles southwest of Watford City in McKenzie County.

The company anticipates starting construction by July 1, with the plant fully in service by the end of 2015. Commissioner Randy Christmann noted if the PSC doesn’t move quickly, it could cost ONEOK the 2014 construction season.

According to paperwork filed by the company, the plant will process natural gas from oil production wells connected to ONEOK’s gathering system. Once processed, natural gas liquids such as propane, butane and natural gasoline will be transferred to on-site storage tanks prior to being sold to an NGL pipeline. Residue gas, largely methane and ethane, will be transferred to the Northern Border Pipeline for transit on that system.

ONEOK’s application also mentions the possibility of a second processing facility that could be of similar size and located on the same parcel of land.

Mike Nowatzki

Mike Nowatzki reports for Forum News Service. He can be reached at (701) 255-5607.