A North Dakota government agency has thrown its support behind a pipeline expansion planned by WBI Energy, raising the odds of new natural gas infrastructure from the Bakken.
On Aug. 21, the North Dakota Industrial Commission (NDIC) announced it will support WBI Energy Transmission’s new Bakken East project. While the commission isn’t funding the project directly, it has directed the head of the North Dakota Pipeline Authority to begin contract discussions to purchase capacity on the line. The NDIC is authorized to appropriate up to $100MM every two years to fund pipeline projects in this manner.
WBI held an open season soliciting bids for the 375-mile greenfield project that concluded on Jan. 31. Originally, WBI proposed a pipeline with 750 MMcf/d of capacity, but the North Dakota Monitor reports Bakken East will be capable of transporting up to 1.0 Bcf/d and that WBI added a new southern lateral to the scope. Financing could be as much as $50MM for 10 years, the paper reports, or a guarantee of up to $500MM.
The award represents a major win for WBI. As covered by East Daley Analytics in May, WBI is competing with a second pipeline proposal to move Bakken gas to eastern North Dakota. Intensity Infrastructure Partners also has proposed a pipeline spanning the state and held an open season for the project earlier this year. Both WBI and Intensity submitted competing proposals to NDIC in July, the North Dakota Monitor reports. The decision to back WBI’s project serves as a setback for Intensity.
East Daley Analytics has not identified any demand sources in the eastern part of the state significant enough to justify the construction of a pipeline of this size, suggesting that both proposals would serve as supply-push pipelines that could incentivize industrial growth and act as a relief valve allowing for more Bakken production growth. This makes it unlikely that both projects will be able to achieve a final investment decision without a large player entering the conversation, and Intensity may see its project unable to move forward. – Ian Heming.
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