American Oil and Gas Reporter - February 2018 - 41

SpecialReport: Multiphase Oil Recovery
While flaring sometimes is necessary,
Ness stresses that it is a last resort.
"Natural gas is a critical economic resource," he says. "From operators and
mineral or royalty owners, to the state
and the tribes, every stakeholder wants
to see as many molecules of natural gas
as possible captured rather than flared."
Ness points out that the state's Department of Mineral Resources requires
operators to capture at least 85 percent
of the gas they produce until November,
when the mandatory capture percentage
will increase to 88 percent. He says meeting that new goal will mean building
gathering systems, processing plants and
transmission pipelines.
"As an industry, we are forming a
gas capture infrastructure task force,
which will bring together producers and
midstream companies to analyze aggregate gas production growth region by
region and determine where more
pipelines and processing plants will be
needed," he says. "The task force also
will look at transmission lines for residual
gas exports."
According to Ness, the task force approach has a track record of success. "It
is a tremendous tool for identifying challenges and bringing forth solutions," he
praises. "By aggregating production data,
it provides a big-picture view of demand
that allows midstream companies to
invest in new infrastructure where it is
needed."

attributes the area's struggles largely to
the lengthy process for getting pipeline
rights of way on the reservation.
"Getting a right of way requires three
separate approvals by the Bureau of Indian
Affairs, three separate approvals by tribal
officials and the consent of 51 percent of
the Native American allottees on every
tract it crosses," he outlines. "It is an
enormous, time-consuming process that
could be streamlined without compromising its integrity."
To promote such streamlining, Helms
says the state Department of Mineral Resources is meeting with tribal officials.
The Missouri Four and three other
gas plants scheduled to come on line in
2018 will boost regional processing capacity by 615 MMcf/d, says Justin J.
Kringstad, director of the North Dakota
Pipeline Authority, a nonregulatory agency
that analyzes and forecasts production to
help midstream companies make sound
investments.
Until those plants begin coming on
line later this year, Kringstad cautions
that regional production will exceed processing capacity in the agency's less conservative case (Case 1 in Figure 1), which
he says January prices and activity levels
support. "The industry is going to have

Transmission Lines
In addition to new gas processing
plants, Kringstad says the industry needs
to invest in additional transmission lines.
"One of the most immediate needs is
more export pipelines for natural gas
liquids," he details. "NGL production
already exceeds pipeline capacity, so
companies are using regional trucks and
long-haul trains to move NGLs to market.
That works in the near term, but economics and expected long-term production growth support additional pipeline
investment."
ONEOK announced in early January
a project that should help alleviate NGL
pipeline constraints. According to the
company, the 900-mile Elk Creek system

FIGURE 1
North Dakota Gas Processing Plant Capacity
3,000

Suspended Capacity
Planned Plant Capacity

Midstream Investments

Existing Plant Capacity

2,500

91-93%
Q4-20

NDPA Case 1 Forecast
NDPA Case 2 Forecast

2,000

88%
Q4-18

Historical Sold, MMcf/d
Historical Flared, MMcf/d
Targets Case 1 (Sold)

1,500

85%
Q4-16

Targets Case 1 (Flared)

80%
Q2-16

1,000

77%
Q1-15
74%
Q4-14

500

-
1
-1

6

6
-1

1

Ja
N n-0
ov 5
-0
5
Ju
M l-0
a 7
M y-0
a 8
Ja r-09
N n-1
ov 0
-1
0
Ju
M l-1
a 2
M y-13
a
Ja r-1
4
N n-1
ov 5
-1
5
Ju
M l-1
a 7
M y-18
a
Ja r-1
9
N n-2
ov 0
-2
0
Ju
M l-2
a 2
M y-2
a 3
Ja r-24
N n-2
ov 5
-2
5

MMcf/d

Lynn D. Helms, director of the North
Dakota Department of Mineral Resources,
reports that midstream companies already
are stepping up to meet anticipated production increases. As an example, he
cites a joint venture between Hess Midstream and Targa Resources Corp. to
construct a natural gas processing plant
capable of handling 200 million cubic
feet a day. The Missouri Four Plant will
be built at Targa's Little Missouri facility,
south of the Missouri River in McKenzie
County, N.D.
Helms mentions that the facility is
near the Fort Berthold Reservation, the
area he says has had the most difficulty
meeting the state's gas capture goals. He

to work hard to continue meeting gas
capture goals, which likely will mean
collaborating to move gas from systems
that are at capacity to ones with spare capacity," he warns.
By early 2020, Kringstad predicts, gas
production again will exceed local processing capacity even with the four new
plants. "There will need to be additional
infrastructure investment that year and
beyond for the industry to keep up with
expected growth volumes," he says.

-0

p
Se

p
Se

p
Se

-2

p
Se

FEBRUARY 2018 41



American Oil and Gas Reporter - February 2018

Table of Contents for the Digital Edition of American Oil and Gas Reporter - February 2018

Contents
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