North Dakota invests in Pipeline to Expand Natural Gas Access & Support Oil Production
North Dakota is moving forward with a plan to construct the Bakken East Pipeline, a project estimated to cost between $1.2 and $1.6 billion,to increase natural gas transportation capacity within the state. The state is utilizing a law allowing it to purchase transport capacity, with an initial investment intended to be recouped through sales to private businesses. Governor Kelly Armstrong (R),chair of the industrial commission,stated that commitments from businesses to utilize the natural gas are already being secured,allowing the state to transfer its pipeline space to them.
The proposed 375-mile pipeline will consist of both 30-inch and 24-inch diameter high-pressure steel pipe and is designed to move up to 760 million cubic feet of natural gas per day from the Bakken oil field. The route will largely parallel the existing Northern Border Pipeline, running near Manning, through the Beulah-Hazen area, crossing the Missouri river near washburn, and extending southeast to Jamestown before terminating in the Fargo area.
Construction is planned in two phases: the first from McKenzie County to Washburn, and the second from Washburn to Mapleton (west of Fargo), with an additional extension planned from Jamestown to Ellendale.WBI (WBI Energy) anticipates phase one will be operational by November 2029, and phase two by November 2030. Currently, the project is in the preliminary stages, involving engagement with engineering, survey, environmental, and land contractors, as well as outreach to landowners.A contractor for the actual construction has not yet been selected.This project is driven, in part, by state regulations aimed at minimizing gas flaring – the practice of burning off excess natural gas at the wellhead. Companies operating in North Dakota are required to capture and utilize or transport a specific percentage of produced natural gas to avoid production restrictions and penalties.
The industrial commission highlighted the pipeline’s potential to support long-term oil production and benefit the state’s economy. As 2015, North Dakota has collected over $22.7 billion in oil and gas tax revenue, funding essential public services like schools, roads, and hospitals. Armstrong emphasized the pipeline will help maintain this revenue stream.
The state law authorizing the investment allows for up to $100 million in pipeline capacity purchases every two years, with a guaranteed commitment of $50 million annually for ten years.Armstrong further explained the project will address a need for increased gas access, stating, “Communities need gas to grow,” and will move currently “stranded” gas from the Bakken to areas where it is indeed needed. Currently, eastern North Dakota relies on the Viking Gas Transmission pipeline, which serves both the U.S.and Canada, and the new pipeline will provide a more secure and localized supply.
