Executive Summary:
Infrastructure: North Dakota’s electricity demand is surging, and natural gas is emerging as the state’s primary solution.
Rigs: The US rig count declined 6 rigs to 526 for the week of Aug. 16.
Flows: US natural gas volumes averaged 70.9 Bcf/d in pipeline samples for the week ending August 24, up 0.7% W-o-W.
Storage: Traders expect the EIA to report a 25 Bcf injection for the week ending Aug. 22.
Infrastructure:
North Dakota is preparing for a surge in electricity demand, with natural gas emerging as the state’s primary solution. Bakken producers and midstream companies are poised to reap gains from new infrastructure projects.
Earlier in August, Basin Electric Power Cooperative secured approval to build the 1,490 MW Bison Generation Station in Williams County. The nearly $4B gas-fired plant will be developed in two phases, with the first 745 MW unit due online in 2029 and the second following in 2030. The plant will run on natural gas produced in North Dakota. Basin officials say the project is driven primarily by load growth tied to oil and gas activity in the Bakken, but they also acknowledge a surge of requests from large-load customers such as data centers.
On the demand side, Applied Digital is expanding its footprint with Polaris Forge 2, a new 280 MW AI data center campus in Cass County. The $3B initiative follows previous developments in Ellendale and Jamestown. Meanwhile, Rainbow Energy is evaluating a 300 MW data center at its coal-fired Coal Creek Station. Although that project provides an alternative baseload option, Basin Electric’s investment indicates that gas will play a central role in future power planning.
North Dakota pipeline projects are also positioning to bridge western supply in the Bakken with eastern demand in the state. After holding open seasons in late 2024 and early 2025, WBI Energy and Intensity Infrastructure Partners are advancing systems that together could move more than 1 Bcf/d of Bakken gas eastward by 2030. WBI’s 375-mile Bakken East Pipeline is designed for ~760 MMcf/d, while Intensity’s two-phase system could add up to 1.5 Bcf/d. With potential interconnects to Northern Border, Alliance Pipeline, and Viking, these projects would link Bakken production to rising data center demand in the east while complementing the industrial pull from oil and gas activity in the west.
However, despite rising demand from new power plants, pipelines and data centers, East Daley’s Bakken outlook shows production remaining broadly flat through 2029 (see figure). Future gains will come from enhanced recovery, higher gas-to-oil ratios, and improved compression. In other words, demand growth will be met by optimizing associated gas capture rather than through a drilling-led upcycle.
Rigs:
The US lost 6 rigs for the week of Aug. 16, bringing the total rig count to 526. The Anadarko (+2) and Eagle Ford (+2) gained rigs and the Bakken (-3), Permian (-2), ArkLaTex (-1), Barnett (-1) and Marcellus – NE PA (-1) lost rigs W-o-W.
At the company level, PSX (+4), ET (+2), KMI (+2) and XTO Energy (+1) gained rigs while TRGP (-5), MPLX (-3), OKE (-2), KNTK (-2), EPD (-1), ETRN (-1) and Aethon Energy (-1) lost rigs W-o-W. At the system level, ET – ENBL Anadarko (+3), PSX – DCP Midland (+2) and Brazos Midstream (+2) gained rigs while MPLX – West OK (-2), OKE – Bakken (-2) and KNTK – Durango Midstream (-2) lost rigs.
See East Daley Analytics’ weekly Rig Activity Tracker for more information on rigs by basin and company.
Flows:
US natural gas volumes averaged 70.9 Bcf/d in pipeline samples for the week ending August 24, up 0.7% W-o-W.
Major gas basin samples declined 0.2% W-o-W to 44.0 Bcf/d. The Haynesville sample decreased 1.5% to 10.6 Bcf/d, and the Marcellus+Utica rose 0.5% to 32.5 Bcf/d.
Several smaller basins included in the ‘Other’ category have posted gains recently, including the Green River and Piceance basins. Samples in these smaller basins collectively gained 0.4 Bcf/d W-o-W to 7.8 Bcf/d.
Storage:
Traders and analysts expect the Energy Information Administration (EIA) to report a 25 Bcf net injection for the week ending Aug. 22. A 25 Bcf injection would decrease the surplus to the five-year average by 13 Bcf to 161 Bcf. The storage deficit to last year would increase 10 Bcf to 105 Bcf.
Market estimates suggest this will be the second week in a row in which the surplus to the five-year average contracts. Cash prices have been unmoved by this development given a cooling trend and weaker demand. The prompt month is likely to go out with a thud as balance-of-the-month prices indicate a settlement of around $2.70-2.80/MMBtu.
East Daley expects injections to climb above the 5-year average for the next few weeks as a wave of below-normal temperatures envelop two-thirds of the Lower 48. With production still humming near 107.0 Bcf/d and demand only finding support from LNG feedgas, the market could get exceedingly loose. Basis prices in the Northeast are at or near $1.50/MMBtu, which could emerge as a threshold for certain operators to throttle back wells, especially if post-Labor Day weather remains uninspiring.
See the latest Macro Supply & Demand Report for more analysis on the storage outlook.
Calendar:
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