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One pipeline project pushes forward; another stalls amid low prices

WATFORD CITY -- One energy company said Tuesday it wants to construct a new pipeline as soon as possible despite low oil prices while a second company said its project is on hold until prices rebound.

WATFORD CITY -– One energy company said Tuesday it wants to construct a new pipeline as soon as possible despite low oil prices while a second company said its project is on hold until prices rebound.

Oasis Midstream Services presented to the Public Service Commission its plan to build a 19-mile pipeline in McKenzie County to deliver oil to the Dakota Access pipeline.

The company, a subsidiary of Oasis Petroleum, said low oil prices have not affected the timing of the $13 million pipeline proposed for the core of the Bakken, said Antonio Macia, project manager with Oasis Midstream.

“Oasis has committed to focus on this area and develop this acreage. And though activity has come down, it’s really consolidated to this area,” Macia said.

The Public Service Commission, which held two back-to-back public hearings in Watford City Tuesday, continues to see pipeline applications at about the same pace despite the slowdown in drilling, said Chairwoman Julie Fedorchak.

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The proposed crude oil pipeline is associated with a natural gas processing plant and crude oil handling facility that Oasis is building near Watford City called the Wild Basin facility.

The crude oil pipeline would originate at Wild Basin and travel east to the area known as Johnsons Corner, a hub for several pipelines.

Oasis plans to construct a lateral pipeline about 1 mile long that would connect the mainline to the Dakota Access pipeline, which is still under regulatory review in Iowa. The pipeline also would connect to a Tesoro terminal at Johnsons Corner if Dakota Access does not get built, Macia said.

The pipeline, which would transport up to 75,000 barrels per day, could eliminate 250 trucks per day off the roads, Macia told commissioners. If the project is approved, construction could begin as early as April 1.

The natural gas plant, which would process up to 80 million cubic feet per day, is scheduled to be complete in the third quarter of this year, Macia said.

The Public Service Commission also heard Tuesday from Oneok Bakken Pipeline, a company that operates in the same area, about a proposal to transport more natural gas liquids out of North Dakota.

The proposed 14.4-mile pipeline in McKenzie County, to be constructed alongside an existing pipeline, would increase Oneok’s capacity from 74,000 barrels per day to 93,000 barrels per day.

The pipeline would transport a mixture of natural gas liquids including ethane, propane and butane for further processing out of state.

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Oneok planned to start construction during the first half of this year, but has postponed the project until 2017, said James Akingbola, project manager.

The company asked the PSC to proceed with reviewing its permit request so construction can begin when energy prices improve.

“We don’t know when but we want to be ready and there when we’re needed,” Akingbola said.

The $19.5 million project would start at the Garden Creek Gas Plant near Watford City and go west and south through McKenzie County. Nearly 90 percent pipeline would mirror an existing Oneok natural gas liquids pipeline and be within the same pipeline right-of-way.

No members of the public testified at either hearing. Commissioner Randy Christmann said when the public doesn’t attend the hearings, if often means the companies have done their homework in working with landowners and obtaining easements.

“Oftentimes the lack of commentary says something even louder than the commentary we receive at other hearings,” Christmann said.

Related Topics: DAKOTA ACCESS PIPELINE
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