Alliance Pipeline is seeking commitments to expand a natural gas transmission pipeline that runs through North Dakota.
The company's announcement this week comes as North Dakota oil and gas regulators are encouraging new infrastructure investment to handle growing volumes of natural gas production.
North Dakota produces more than 2 billion cubic feet of natural gas per day. That volume is projected to climb to between 3.5 billion and 4.5 billion cubic feet per day by 2035, said Justin Kringstad, director of the North Dakota Pipeline Authority.
Alliance Pipeline receives natural gas from British Columbia, Alberta and North Dakota and transports an average of 1.6 billion cubic feet per day to markets in Chicago. The company is seeking commitments from industry to transport another 400 million cubic feet per day, or a 25 percent increase.
"Strong customer demand is the driver for this initiative,” said Dan Sutherland, Alliance vice president for commercial operations, in a statement.
The Alliance Pipeline enters North Dakota in Renville County and travels southeast through the state to Richland County.
If the expansion receives regulatory approval, it would require an additional three compressor stations in North Dakota located near Maxbass, Munster and Lisbon, said Alan Roth, a spokesman for Alliance. The expansion is proposed to be in service by the end of 2021.
Kringstad said additional transmission pipeline capacity is one piece of the puzzle to reducing natural gas flaring, along with developing more gathering pipelines and processing plants.
“Looking ahead, I do expect a need for additional transmission capacity out of the region,” Kringstad said.
North Dakota natural gas production has continued to climb even as oil production dropped or held flat, increasing about 35 percent in 2017.
Bruce Hicks, assistant director of the Oil and Gas Division, told the North Dakota Industrial Commission this week that the growth is in part due to industry’s focus on drilling in the core of the Bakken, where wells tend to produce more gas.
In addition, as Bakken oil and gas wells mature, they tend to produce a higher ratio of natural gas, Hicks said.
Two shorter pipelines in northwest North Dakota connect to the Alliance Pipeline, the Tioga lateral, also owned by Alliance, and the Prairie Rose Pipeline.
Both of those pipelines are essentially full, according to Kringstad. If additional North Dakota natural gas volumes are committed to Alliance, it would require additional pipeline capacity to connect to Alliance, Kringstad said.