A natural gas plant proposed west of Williston could help reduce wasteful flaring in the northern part of the Bakken oil patch.
Denver-based Outrigger Energy II plans to build the facility in Williams County to process up to 250 million cubic feet of gas per day, with the option of expanding to handle up to 450 million cubic feet.
CEO Dave Keanini said crude oil prices surpassing $50 per barrel have been high enough lately to spur more oil drilling in the Bakken, and that’s made the area attractive to his company.
“We like being in basins where there’s a lot of activity and a lot of growth going on,” he said.
The company also intends to build a 70-mile gathering pipeline that starts in eastern Williams County and ends at the processing plant. It has entered into an agreement with XTO Energy to transport gas from the producer’s wells.
Keanini said XTO “is the big fish” in the area, but the line will be located near wells operated by other producers, too, and it has the potential to service them down the road.
The Outrigger processing plant is the sixth facility of its kind in the works in North Dakota. Officials hope the investments will significantly curb the amount of excess gas that is flared in the state.
Combined, the proposed facilities would have the capacity to process an additional 1.075 billion cubic feet per day of gas, according to the North Dakota Pipeline Authority. They follow four plants that came online in the latter half of 2019 and can accommodate up to 670 million cubic feet per day.
The latest figures available show that more than 500 million cubic feet per day of gas is flared at oil wells in North Dakota. That accounts for 18% of gas produced in the state, which is above North Dakota’s 12% flaring target. The amount of gas flared peaked during the summer of 2019 amid a lack of pipelines and processing facilities as oil production climbed.
State Pipeline Authority Director Justin Kringstad said the announcement about the Outrigger plant is “very encouraging” for curbing flaring in the northern part of the state.
“There’s been a tremendous amount of investment and expansions south of Lake Sakakawea over the past couple years, but this will be one of the most major near-term expansions north of Lake Sakakawea,” he said.
The Outrigger plant would be one of the only cryogenic plants north of the lake, Keanini said. Other processing plants separate out natural gas liquids such as butane and pentane from the stream of raw gas that arrives at the facility, but they are not able to cool the gas enough to remove all the propane or ethane, he said.
The Outrigger plant would have the capability to remove propane and ethane. Keanini said the company intends to send the remaining gas to market down the Northern Border Pipeline.
The liquids removed by the proposed plant would travel on an existing Oneok pipeline system. Keanini said Outrigger might build a fractionation facility down the road to further process the liquids by separating each individual component. For example, the company could isolate propane from the other liquids and sell it locally.
Outrigger plans to have the pipeline in place and the processing plant running by Dec. 15. It will need to secure several state approvals for the plant, including permits from the Public Service Commission and the Department of Environmental Quality.
Outrigger plans to build the plant near the North Dakota-Montana state line. There’s a chance the company could build it in Montana if it runs into trouble securing local permits, Keanini said.
“We’re hoping to be able to keep it in North Dakota,” he said.
He declined to disclose an estimated cost for the plant and pipeline, citing the agreement with XTO.
Reach Amy R. Sisk at 701-250-8252 or email@example.com.
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