Another pipeline could soon up its capacity to carry more Bakken oil out of North Dakota, marking the third announcement of a major pipeline project in the state over the past month.
Two energy companies are looking for commitments from shippers to expand the Hiland Crude system. Kinder Morgan operates Hiland, which carries up to 88,000 barrels of oil per day from Dore in McKenzie County to Wyoming via its Double H Pipeline. From a hub there, Tallgrass Express’s Pony Express Pipeline transports up to 375,000 barrels per day south to three refineries and a terminal in Oklahoma.
It’s unclear how much more oil the companies intend to send through their lines. Kinder Morgan spokeswoman Katherine Hill said the operator will evaluate expansion of its Hiland system “based on the level of interest and volume commitments obtained.”
Tallgrass may consider expanding its Pony Express system as well, she said. A spokeswoman for Tallgrass declined to comment beyond a press release announcing the project, indicating that more information would be available after the deadline for shipper commitments on July 28.
A spokeswoman for the state Public Service Commission said the agency has not received any applications to expand the Hiland system. Whether Kinder Morgan would need additional state permits depends on whether the company plans to build outside the pipeline’s existing corridor.
It’s unclear how the operators would boost the amount of oil sent through their lines, but they have several options. They could add more horsepower to their pumping systems or add a chemical to the oil to help reduce friction along the lines and improve flow, according to Justin Kringstad, director of the North Dakota Pipeline Authority.
As a third option, he said, some companies build small pipelines along a section of an existing line.
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“Every one of those (methods) has been implemented in some way, shape or form as their systems have expanded,” Kringstad said.
Operators have expanded many pipelines in North Dakota since the Bakken boom took off more than a decade ago, he said.
The latest plan to expand another pipeline came in June when Energy Transfer announced it wants to nearly double the capacity of the Dakota Access Pipeline to carry 1.1 million barrels of oil per day from the Bakken to Illinois.
Another operator, True Companies, is proposing to send up to 175,000 barrels per day from the Bakken to Wyoming via a new pipeline known as the Bridger Expansion, Kringstad said.
North Dakota Petroleum Council President Ron Ness called the three projects “fantastic news.”
“It shows you the pipeline operators are bullish on oil production increasing, and the refiners of Louisiana and the Gulf Coast and other places want Bakken crude oil,” he said.
Having the ability to move more oil out of North Dakota by pipeline helps ensure Bakken crude is not sold at a discounted price, Kringstad said.