Sep 24, 2007 - 08:59:07 CDT
North Dakota's rising oil production has boosted the state's output of natural gas, prompting companies to expand some existing processing plants and plan construction of four new ones.Most of the new capacity is to process natural gas that is a byproduct of oil production, although one plant being built near Ray by Whiting Petroleum Corp., of Denver, is to handle the output of two natural gas wells, state regulators and company spokesmen say.
Natural gas normally is processed before it is sold to pipelines that supply it to their own customers. Processing removes sulfur, which is a pollutant, and liquids such as butane and propane, which are sold separately.
Much of the gas being produced by oil wells in western North Dakota's middle Bakken geologic formation has little or no sulfur, said Lynn Helms, director of North Dakota's Department of Mineral Resources.
Gov. John Hoeven told the newly formed Energy Policy Commission last week that new natural gas processing initiatives represent $190 million in new investment in western North Dakota's energy region, with a 63 percent increase in natural gas processing capacity.
Natural gas prices have declined in recent months. John Kelso, a Whiting Petroleum spokesman, said the company has been selling natural gas for about $2.50 per thousand cubic feet, compared to a $5 price six months ago.
"It hasn't been all that hot, but it is a situation that changes every day," Kelso said. "Even at $2.50, these wells are economic."
Helms said that until the late 1990s, natural gas that came as a byproduct of North Dakota oil production sold for about $1 per thousand cubic feet. "It was almost treated like a waste product," he said.
"Today, it's still not on an energy par with crude oil ... but it is a significant economic gain to these companies to process and sell that gas," he said.
Whiting, EOG Resources Inc., of Houston, PRB Energy Inc., of Denver, and Headington Oil Co., of Dallas, are developing new natural gas processing plants in northwestern North Dakota, company spokesmen and state regulators say.
Two existing plants, the Hess Corp. plant at Tioga and Bear Paw Energy LLC's Grasslands plant in McKenzie County, are being expanded. Bear Paw alone is investing $30 million to increase its capacity of 63 million cubic feet per day to about 100 million.
North Dakota's daily oil output, which went above 100,000 barrels daily in February 2006, is now at about 123,000 barrels, helped by exploration advances in the middle Bakken.
Some of the most notable new production is coming from areas not noted for producing crude, such as the Parshall area in southern Mountrail County. Natural gas processing plants typically are close to where the gas is produced, and the recent development of new plants is intended to catch up, Helms said.
"We have so many new areas that are being developed," he said. "There was no infrastructure ... for the gathering and selling natural gas. The Bakken drilling is taking us to places where we didn't have infrastructure, so we're going to build new plants to gather that (natural gas)."
mark wrote on Oct 17, 2008 3:22 AM:
2006 saw 39.5 million barrels come out ND.
2007 production reached 44.7 million.
And 2008 is projected to surpass 61.5 million or there abouts. Oil boom? YEA. "
NoOneKnows wrote on Sep 24, 2007 7:34 PM:
PO3toTommy wrote on Sep 24, 2007 6:47 PM:
gg wrote on Sep 24, 2007 4:18 PM:
Wahoo wrote on Sep 24, 2007 3:38 PM:
Tommy wrote on Sep 24, 2007 12:59 PM:
Comments are reviewed for taste, tone and language before posting.
Some comments may be used in the Tribune's print edition.
We value and respect your privacy, but The Bismarck Tribune might
disclose certain information to governmental entities if served with subpoena.