State Working for Additional Pipeline Capacity

Gov. John Hoeven today said two significant efforts are underway to further add to North Dakota's petroleum pipeline capacity and encourage additional production in the state.

KEYSTONE XL PROJECT MEETING

Gov. Hoeven and Montana Gov. Brian Schweitzer will meet Wednesday, March 3 in Billings with TransCanada Pipeline officials and North Dakota and Montana petroleum industry leaders to discuss a possible on-ramp for the states' oil producers on the company's Keystone XL Pipeline. TransCanada is planning and permitting a large crude oil pipeline from northern Alberta to oil refineries in the gulf coast, which has a targeted service date of 1012. The pipeline would run through Montana, but would run close to the border of southwestern North Dakota.

Both Hoeven and Schweitzer have met with Keystone officials and local producers to promote the idea of an on-ramp for local producers. North Dakota has worked to significantly expand pipeline capacity, and in fact, pipeline capacity now exceeds oil production in the state. As a result, discounts are due primarily to distance to markets or consumers, not pipeline constraints. North Dakota, however, is working to develop more pipeline capacity to encourage increased oil production in the state.

ENBRIDGE PIPELINE PROPOSED PROJECT

Hoeven and state officials are also working with Enbridge Pipeline to expand capacity northward. Enbridge today announced it is evaluating the construction of additional pipeline capacity of about 115,000 barrels per day from Beaver Lodge Looping Station, in northwestern North Dakota, through Stanley into an existing portal at Berthold. Also known as the Enbridge Phase 7 project, the total cost of the plan would range up to $300 million, depending on how many features are incorporated into the project.

Previously, the company shipped crude south from Steelman, Saskatchewan to Berthold, N.D. The company is now proposing to add pumps and compressors to reverse the portal so that North Dakota producers could ship product into a pipeline that ships crude to refineries in the United States. In addition, Enbridge is evaluating the feasibility of a number of smaller pipeline gathering projects in North Dakota designed to provide state shippers with additional access into the system.

The company has said if it determines there is enough interest and economic viability to proceed with the project, it will begin the formal process this spring. If all agreements and government permitting can be secured this year, construction could begin in 2012.

Source: Governor's Office