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Pipeline Summit

Pipeline summit looks at moving oil

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Officials listen to panel discussion on pipeline projects

Governor Jack Dalrymple, center, sits with, from left, Alex Pourbaix, of TransCanada; Niles Huschka of Kadrmas Lee & Jackson; Dalrymple, David Lytle of Saddle Butte Pipeline; and Justin Kringstad of the North Dakota Pipeline Authority at the Governor's Pipeline Summit on Thursday morning in Bismarck. All five were scheduled speakers at the event held on the Bismarck State College campus.

Representatives from the oil and gas pipeline industry gathered in Bismarck Thursday to discuss ongoing industry efforts to expand capacity in North Dakota.

More than 100 industry and state officials met for the North Dakota Governor’s Pipeline Summit. The event was held at the National Energy Center of Excellence on the Bismarck State College campus.

Gov. Jack Dalrymple said the increase in oil production has been extremely rapid, making additional pipeline capacity vitally important. Three years ago, North Dakota oil production was at about 195,000 barrels of oil per day. April production statistics put state oil production at about 609,000 barrels per day.

“These companies are really stepping up, they’re really making some large capital investments,” Dalrymple said.

Dalrymple said pipeline capacity in North Dakota was approximately 286,000 barrels per day three years ago. By the end of 2012 he said capacity is expected to be about 538,000 barrels per day.

Alex Pourbaix, president of energy and oil pipelines for TransCanada, spoke about the ongoing efforts to get the controversial Keystone XL pipeline approved.

Pourbaix said on May 4 the company reapplied for a presidential permit for the proposed 1,700-mile pipeline project. If approved, the pipeline would stretch from the Canadian province of Alberta to the Gulf Coast. Of the total pipeline capacity of 830,000 barrels of oil per day, a total of 100,000 barrels of oil per day has been promised to be dedicated to Bakken crude. The majority of the oil traveling through the pipeline would be Canadian oil from the Athabasca Oil Sands in Alberta.

“We’ve had a great deal of interest from Bakken producers,” Pourbaix said.

The proposed Keystone XL pipeline has been under review for more than three years. It has drawn criticism from environmental groups over a stretch that would pass over the environmentally sensitive Ogallala Aquifer in the Nebraska Sand Hills. President Barack Obama denied the company a permit in January.

Pourbaix said TransCanada has decided to move forward with the southern leg of the pipeline. The southern portion of the pipeline would run from Cushing, Okla., to Port Arthur, Texas.

Pourbaix said TransCanada hopes to have approval for the northern leg of the Keystone XL by early 2013. If approved, the project would be completed and come online in 2015. Pourbaix said since the Keystone XL controversy began, the importance of communication by the industry has become evident.

“They’re incredibly safer than trucks,” Pourbaix said. “Not only are pipelines safe, they’re becoming even safer.”

Mick Urban, government relations manager for Oneok, said the company has investments between $3.2 billion and $3.7 billion planned for North Dakota. The company primarily deals with the gathering, processing and transportation of natural gas and natural gas liquids.

“This is a liquid-rich play,” Urban said.

The company is in the process of building the Bakken NGL Pipeline. The 525-mile pipeline will transport natural gas liquids from western North Dakota to northern Colorado. The cost of the project is between $595 million and $730 million. The pipeline, which is expected to be completed in the first half of 2013, would have an initial capacity of 60,000 barrels per day.

Urban said projects such as the Bakken NGL Pipeline will fill an “unmet need” in gathering natural gas in the Williston Basin, a large amount of which is being flared.

The company also announced its first oil pipeline project, the Bakken Express Crude Pipeline, in April. The 1,300-mile oil pipeline has an estimated cost between $1.5 billion and $1.8 billion. It would begin in Stanley and run south to Cushing. Construction is set to begin in 2013 and is to be completed in 2015. It would have a capacity of 200,000 barrels of oil per day.

Officials with Alliance Pipeline, WBI Energy, Enbridge, Bridger/Belle Fourche Pipelines, Plains All American Pipeline and Saddle Butte Pipeline also spoke at Thursday’s gathering.

Dalrymple said the projects under construction by pipeline companies operating in western North Dakota are improving the efficiency of getting oil and natural gas to market. He said the increased pipeline capacity also will be able to, in time, greatly reduce the number of trucks that’ve sharply increased traffic on oil patch roads. Dalrymple said this will be a positive development for western North Dakota.

“Build more, do more, gather more. And do it as fast as you possibly can,” Dalrymple said.

Reach Nick Smith at 250-8255 or 223-8482 or at nick.smith@bismarcktribune.com.

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