Ethane Pipeline Project Would Feed Canadian Demand

WILLISTON, N.D. – A proposed pipeline would send more ethane from the Bakken to Alberta’s petrochemical industry, adding value to North Dakota natural gas as the state works to reduce flaring.

Vantage Pipeline laid out its plans Thursday to the North Dakota Public Service Commission for a 47-mile pipeline that would transport liquid ethane in Williams and Divide counties.

The pipeline would start at Oneok Partners’ Stateline II gas processing plant near Williston and connect to the existing Vantage ethane pipeline system near the Canadian border, transporting 26,000 barrels per day.

Public Service Commissioner Randy Christmann said he thinks the proposal is an exciting project because adding more value to natural gas could add more incentive to producers to capture gas that is currently being flared.

North Dakota produced more than 1.6 billion cubic feet per day of natural gas in May. Producers flared 18 percent of the gas that month.

Most ethane produced in North Dakota is blended with methane and consumed by homes and businesses, or it’s blended with other natural gas liquids and shipped out of state for further processing, said Justin Kringstad, director of the North Dakota Pipeline Authority.

Separating the ethane from other natural gas liquids attracts a premium price for producers,  said Jason Wiun, vice president for conventional pipelines for Pembina, a Canadian company that acquired Vantage.

Oneok is spending an estimated $60 million to $80 million to construct de-ethanization towers at the Stateline facility to separate ethane on site, said spokeswoman Stephanie Higgins. The construction is expected to be complete in the second quarter of next year.

Higgins said the project is not expected to have a direct effect on flaring because it won’t enable the company to capture more natural gas produced at the wellhead.

Vantage has a long-term agreement to sell the ethane to Nova Chemicals in Alberta, where it’s used to produce plastics, rubber, detergents and other consumer products. Gas drilling has declined in Alberta, and the regional ethane supply is projected to fall short of the petrochemical industry’s demand, Wiun said.

“Imports from the Bakken formation and other shale plays are expected to supply the deficit over the next 20 years,” Wiun said.

Vantage currently transports 20,000 to 25,000 barrels per day of liquid ethane from the Hess gas processing plant in Tioga to Alberta. The proposed pipeline, which would connect with the existing Vantage line near Stady in Divide County, would be the only additional pipeline to transport pure ethane in North Dakota.

Commission Chairwoman Julie Fedorchak said she’d like to see North Dakota develop its own petrochemical industry.

Badlands NGL’s LLC and two partners announced plans last October for a $4 billion plant in North Dakota that would convert ethane gas into polyethylene for use in plastic products. In June, the company said it had yet to secure an ethane supply for the project.

“I’m hopeful long-term that there’s more ethane that stays in North Dakota, but I also understand there’s plenty of ethane, so there should be enough to go around,” Fedorchak said.

If the Public Service Commission approves the pipeline, construction could start as early as September. The company aims to put the pipeline into service in early 2016.

Commissioners said it was encouraging to see that Vantage has secured easements with 100 percent of landowners.

“Apparently they’re working pretty well with landowners,” Christmann said.

Commissioners pressed Vantage officials for details about reclamation and the company’s contingency plans if they are still doing construction during winter weather.

“With the magnitude of pipeline construction occurring in North Dakota, we have to do the reclamation right,” Fedorchak said.