North Dakota oil production has hit a new milestone: 1.5 million barrels per day.
“It should be a very happy holiday for the state of North Dakota,” Mineral Resources Director Lynn Helms said Friday upon releasing the latest oil figures, which reflect production during the month of October.
The record number, nearly 1.52 million barrels per day, comes after oil production dropped to 1.44 million barrels per day in September amid rainy weather that shuttered roads in western North Dakota and slowed down activity in the oil patch.
Helms said he anticipates production will continue to increase in the Bakken for the foreseeable future, as OPEC and Russia agreed this month to curb their oil outputs in an effort to reduce an abundant global supply and bolster prices.
“It should result in small increments of production growth through the year 2020,” Helms said of the impact of the other nation’s cuts in North Dakota.
Events overseas also led to ripple effects this fall within the transportation of Bakken oil. Attacks on Saudi Arabian oil facilities disrupted imports of crude to East Coast refineries, North Dakota Pipeline Authority Director Justin Kringstad said.
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“Those East Coast refineries, they really only have two options for crude sourcing: that’s either waterborne barrels coming from foreign sources or it’s crude-by-rail coming into the region,” he said.
With oil imports temporarily curbed from Saudi Arabia, refiners sought out more Bakken crude. In September, for the first time since January 2017, more oil-by-rail shipments from North Dakota went to the East Coast than the West Coast, which usually dominates the market share for oil transported by train out of the Bakken.
Kringstad said he anticipates that shift to be short-lived, as it didn’t take long for Saudi Arabia to ramp up its oil output following the attacks.
This week marked a significant development for the transportation of natural gas out of North Dakota. Oneok's Elk Creek Pipeline began operating, carrying up to 240,000 barrels per day of natural gas liquids from the Bakken to Kansas. NGLs include ethane, propane and butane, which are components of natural gas that exist in liquid form under certain temperatures and pressures.
The startup of that pipeline offers relief to existing and new natural gas processing plants, which have not been able to operate at full capacity.
“You can have all the processing capacity in the world, but if you don’t have an outlet at the tailgate of that facility for those NGLs, that plant will become congested and it will not be able to operate at its stated capacity,” Kringstad said.
Helms said the demand for space on the Elk Creek Pipeline is so high that he anticipates it will be full in a matter of weeks.
“There’s already plans in the works for an expansion,” he said.
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