Page 6 - NorthAmOil Week 25
P. 6
NorthAmOil PIPELINES & TRANSPORT
NorthAmOil
Energy Transfer planning to double Dakota Access capacity
US MIDWEST
ENERGY Transfer Partners is planning to nearly double capacity on its Dakota Access pipeline, from 570,000 barrels per day currently to up to 1.1mn bpd. If the plan goes ahead, it will allow the pipeline to transport nearly all of North Dakota’s daily oil production.
Energy Transfer set out the plan in a letter to the North Dakota Public Service Commission on June 19. An Energy Transfer lawyer, Law- rence Bender, said that the increase in capacity would “allow Dakota Access to meet the growing demand from shippers by optimising and fully utilising the existing pipeline infrastructure, without the need to install new pipelines, and without the need for shippers to use less safe and e cientmeansoftransportation,suchasrail”.
Dakota Access is currently authorised to ship up to 600,000 bpd in North Dakota. e pro- posed capacity expansion would include new pumping stations in three states.
The proposal comes as North Dakota’s oil production continues to rise. The state is the second largest producer in the US a er Texas, and its output was 1.39mn bpd in April, down slightly from a record 1.4mn bpd in January.
The US Energy Information Administra- tion (EIA) has forecast that the Bakken region – mainly North Dakota – will produce 1.44mn bpd in July, up by 11,000 bpd on June’s projected output. If the region’s production keeps grow- ing, this could certainly create demand for new takeaway capacity. And given the major levels of opposition Energy Transfer encountered to launching Dakota Access, it is easy to see how expanding existing pipelines could be preferable to building new infrastructure.
e $3.8bn Dakota Access carries oil from the Bakken play through South Dakota and Iowa to a connection with the Energy Transfer Crude Oil Pipeline, which transports crude from Illinois to Nederland, Texas. It entered service in 2017. e planned expansion work is estimated to cost up to $40mn in North Dakota alone.
The company sought additional shipper commitments in October 2018 for additional capacity on Dakota Access. Last week, it said the commitments “highlighted the continued mar- ket demand and need for additional capacity out of the Bakken”.
Indeed, other pipeline operators are also planning new capacity out of the region. Phil- lips 66 and Bridger Pipeline announced on June 10 that they had formed a joint venture to build the Liberty Pipeline, which will transport crude from the Bakken and Rockies regions to the Cushing oil hub in Oklahoma. Bridger is also proposing the Bridger Expansion to connect with Liberty, initially transporting up to 175,000 bpd from North Dakota to Wyoming, where Liberty will originate. e Bridger Expansion would be the rst major oil pipeline to be built in North Dakota since Dakota Access if it obtains all necessary regulatory approvals.
Phillips 66 is also a partner in Dakota Access, and its chairman and CEO, Greg Gar- land, said on June 19 the project was running at full capacity and could be expanded. Speak- ing at the JP Morgan Energy Conference in New York, he described Dakota Access as a “great investment” and said Phillips 66 was “very supportive” of continuing to expand the project’s capacity.
If the region’s production keeps growing, this could certainly create demand for new takeaway capacity.
P6
w w w . N E W S B A S E . c o m Week 25 27•June•2019
