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Proposed pipeline would send Bakken oil east through Canada

WILLISTON -- A proposed pipeline from the same company behind the Keystone XL would connect Bakken crude with markets now reached only by rail. TransCanada Corp. plans to seek approval for the $600 million Upland Pipeline that would carry oil fro...

WILLISTON - A proposed pipeline from the same company behind the Keystone XL would connect Bakken crude with markets now reached only by rail.
TransCanada Corp. plans to seek approval for the $600 million Upland Pipeline that would carry oil from south of Williston and head north to connect with other pipelines that reach markets in eastern Canada and the eastern United States.
The company said in a statement it has significant interest from shippers in the Williston Basin - in both the U.S. and Canada - for the project. It would have an initial capacity of 220,000 barrels per day with potential of carrying up to 300,000 barrels per day.
There’s a large demand on the East Coast and in eastern Canada for light, sweet crude, said Justin Kringstad, director of the North Dakota Pipeline Authority. But currently the only access North Dakota oil has to refineries in eastern Canada is by rail or truck, Kringstad said.
“Projects like this then open up that possibility for pipeline movement,” he said.
Of the 1.2 million barrels of oil produced per day in North Dakota, the state had about 820,000 barrels of oil per day - enough to fill about 11 trains - leaving the state by rail in December. About 59 percent of oil was transported by rail with 35 percent by pipeline.
The safety of transporting Bakken crude by rail continues to be a debate nationwide, particularly on the heels of this week’s fiery train derailment in West Virginia. That train was carrying oil from North Dakota.
The Upland Pipeline would be in use in 2018 if approved by the U.S. State Department, Canada’s National Energy Board and the North Dakota Public Service Commission.
TransCanada’s Keystone XL Pipeline has been long been stalled in the U.S. regulatory process and faces a presidential veto. That project would have the capacity to transport up to 100,000 barrels per day of Bakken crude from an on-ramp in Baker, Mont.
Congress passed a bill that would give it the power to approve the project, a decision lies in President Barack Obama’s hands. The bill will go to the White House next week, though Obama is expected to veto the legislation.
The Upland Pipeline would cross the border near Northgate, Saskatchewan, and Lignite and end near the Manitoba-Saskatchewan border in Canada. It would connect with other pipelines including the Energy East Pipeline in Saskatchewan.
TransCanada has commitments for 70,000 barrels per day from North Dakota for the Upland, a company spokesman said.
Meanwhile, another Bakken crude oil pipeline went into service this month and the largest proposed pipeline for the Bakken took a step forward recently by applying to the Public Service Commission.
The Double H Pipeline that transports oil from North Dakota to Guernsey, Wyo., went into service this month, said a spokesperson for Kinder Morgan, which recently acquired the pipeline from Hiland Partners.
The pipeline that starts near Dore near the Montana state line in McKenzie County, and has the capacity of transporting 84,000 barrels per day. The company did not disclose how much it is currently transporting.
But looking forward, all other major crude oil pipelines proposed for North Dakota are years away from going into service, meaning a majority of oil will continue to be hauled by rail until they’re completed.
“There will be a period of time there where we won’t have any pipeline projects going into service until those are finished with construction and commissioned,” Kringstad said.
Energy Transfer Partners, which proposes the Dakota Access Pipeline from North Dakota to southern Illinois, recently submitted its initial application to the Public Service Commission, Chairman Brian Kalk said Thursday.
That project would have a capacity of 450,000 barrels per day, the largest currently proposed for North Dakota.
Kalk anticipates that the proposed pipeline would have hearings with the PSC early this summer. The project also needs to go through the regulatory process in other states along the route.
The other major pipeline projects on the table that would serve the Bakken are Enbridge’s Sandpiper Pipeline, which is still going through the regulatory process in Minnesota, and the Keystone XL.

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