BISMARCK, N.D. — A major natural gas company operating in North Dakota's oil patch announced plans Tuesday to build its largest processing plant in the state and expand a major pipeline.
Tulsa, Okla.-based ONEOK Partners announced a fresh round of investment in western North Dakota — estimated between $650 million and $780 million by 2016.
The company's Lonesome Creek natural gas processing plant is to be 12 miles west of Watford City, with a capacity to process 200 million cubic feet per day of natural gas. Upon completion in late 2015, it would be the largest ONEOK plant in the state.
It's expected to cost between $320 million and $390 million to build. Between 300 and 400 construction jobs will be created during the construction of the plant.
Once completed, ONEOK's permanent employment at its plant is expected to be at approximately 250.
ONEOK Partners President Terry Spencer, who made the announcement, said the company's rapidly growing footprint in North Dakota is critical to producers in the state and to reducing the flaring of natural gas.
"We are committed to being part of the solution," Spencer said. "Current and future infrastructure ... will reduce flaring substantially."
With the Lonesome Creek plant, ONEOK's total processing capacity in the state will be 800 million cubic feet of natural gas per day.
An investment between $230 million and $290 million is planned for upgrades to existing infrastructure in the state.
ONEOK also will be investing $100 million in an expansion of its 600-mile Bakken NGL pipeline, which was completed in April.
The expansion is the second of the pipeline since its completion. The first expansion, to be completed in 2014, will take the pipeline from an original capacity of 60,000 barrels per day of natural gas liquids to 135,000 barrels per day.
The expansion announced Tuesday would increase capacity to 160,000 barrels per day.
Gov. Jack Dalrymple praised ONEOK's aggressive expansion into western North Dakota. The Lonesome Creek project is the company's sixth natural gas plant either built or under construction in the state since 2010 and seventh overall.
ONEOK's investment in North Dakota overall since 2010 has been between $3.1 billion and $3.4 billion.
"That is a remarkable capital investment," Dalrymple said.
It's going to take time to rein in natural gas flaring in North Dakota, he said.
The percentage of natural gas being flared in the state was at 29 percent in September, the most recent data available. According to the U.S. Energy Department's Energy Information Administration, approximately 1 percent of all natural gas in the country is flared.
Dalrymple said he expects the additional ONEOK infrastructure to make a large dent in the amount of flaring, but it doesn’t completely solve the problem.
"No one is going to declare 'mission accomplished' here today," Dalrymple said.