New crude oil pipeline proposed for Bakken Shale

ONEOK Partners plans to invest $US1.5-1.8 billion between 2012 and 2015 to build a 2,092 km pipeline with the capacity to transport 200,000 bbl/d of crude oil from the Bakken Shale to Cushing, Oklahoma.

The Bakken Crude Express Pipeline will transport light-sweet crude oil from the Bakken Shale in the Williston Basin in North Dakota, to the Cushing crude oil market hub. Additionally, the proposed pipeline route will be well-positioned to transport crude oil production from the Niobrara Shale.

The proposed pipeline route is expected to parallel more than 80 per cent of ONEOK’s existing and planned natural gas liquid (NGL) pipelines.

ONEOK said that the pipeline will be designed, constructed and operated using proven technology, pipeline control systems and continuous safety monitoring.

ONEOK President Terry Spencer said “As producers continue to aggressively develop crude oil from wells in the Bakken Shale, more crude oil pipeline takeaway capacity will be required. This proposed pipeline will provide producers with efficient and reliable transportation of their product directly to one of the largest crude oil market hubs in the United States.

“It also represents our entry into the crude oil transportation business and utilises our existing core capabilities of transporting and storing natural gas, NGL and refined petroleum products,” he said.

Supply commitments for the proposed pipeline are in various stages of negotiation. Following receipt of all necessary permits and compliance with customary regulatory requirements, construction is expected to begin in late 2013 or early 2014, and be completed by early 2015. Based on supply commitments prior to construction, the capacity can be increased.

ONEOK Partners is one of the largest publicly traded master limited partnerships, and is a leader in the gathering, processing, storage and transportation of natural gas in the US. The company owns one of the nation’s premier NGL systems, connecting NGL supply in the Mid-Continent and Rocky Mountain regions with key market centres.

The partnership has previously announced that it is investing between $US2.8 billion and $US3.5 billion through 2014 in growth projects. Of these projects, it is investing $US1.6-2 billion in projects related to the Bakken Shale that include the approximately 805 km NGL pipeline, the Bakken Pipeline; approximately 435 km natural gas gathering system and related infrastructure in Divide County, N.D.; and, three 100 MMcf/d natural gas processing facilities – Garden Creek plant, Stateline I plant and Stateline II plant – and related infrastructure. The Garden Creek plant went into service in December 2011.

Additionally, the partnership has a $US1 billion-plus backlog of unannounced growth projects that will be announced when sufficient supply commitments are completed.

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