TIOGA, N.D. – The expansion of the Hess Corp. Tioga Gas Plant will significantly reduce natural gas flaring and could be North Dakota’s gateway to the petrochemical industry.
State and company officials gathered here Monday to celebrate the completion of the plant’s expansion, which more than doubles the plant’s processing capacity.
The expanded gas plant now produces ethane, a new product for North Dakota. The ethane is transported by pipeline to a plastics plant in Alberta, Canada.
The production of ethane is significant for North Dakota, with several companies looking at petrochemical manufacturing opportunities in the state, said Director of Mineral Resources Lynn Helms.
“It really starts a whole new era for North Dakota,” said Helms, one of several state officials who attended the event. “With the growth in gas production in North Dakota, petrochemical manufacturing out of ethane is right on the doorstep.”
North Dakota Commerce Commissioner Alan Anderson said the possibilities are exciting for the state.
“The question becomes, Why not have a plastic plant in North Dakota instead of shipping it all the way to Canada?,” Anderson said.
The Tioga Gas Plant also produces propane, methane, butane and natural gasoline.
When operating at full capacity, the plant will produce enough energy to meet 2½ times the residential fuel needs of North Dakota, said Hess President Greg Hill.
“That really puts it in perspective,” Hill said.
Hess, one of North Dakota’s largest oil and gas producers, recently flared about 25 percent of its natural gas. With the expanded plant, Hess now flares 15 percent to 20 percent of its natural gas, with a goal of reducing that to 10 percent or below by 2017.
Hess invested $1.5 billion between 2012 and 2014 on the plant expansion and a gas-gathering system. Prior to the expansion, the 60-year-old plant processed about 100 million standard cubic feet of gas per day.
It now processes 120 million standard cubic feet per day and has the capacity to process 250 million, with a potential to increase to 300 million.
The plant also will process natural gas produced by other companies.
“It’s not only going to be great for this company, but it’s going to be great for the state,” Hess Corp. CEO John Hess said.
The expansion is expected to reduce the state’s overall flaring percentage from 33 percent in March to the low 20s in April or May, Helms said.
Hess, which drilled North Dakota’s first oil well in 1951, operates 17 drilling rigs in North Dakota and expects to produce an average of 80,000 to 90,000 barrels of oil per day this year.
Gov. Jack Dalrymple and U.S. Sen. John Hoeven, R-N.D., thanked Hess for making the investment in North Dakota.
“This is a huge step forward for us in reducing flaring. This big increase in capacity is going to have an immediate benefit,” Dalrymple said. “But it’s all part of a bigger plan to require companies to have a plan for the use of the gas as they continue to drill and as they continue to develop.”
The expansion was completed over 2½ years with a peak of 1,400 people working at the site at one time. Now that it’s operational, the plant employs 100 full-time workers and 40 contractors.