Oneok plans new North Dakota natural gas factory

By James MacPherson
Associated Press

BISMARCK, N.D. (AP) — An Oklahoma energy company said it will build its biggest factory yet in western North Dakota to help capture and bring to market more of the natural gas that currently is being burned off as a byproduct of soaring oil production.

Oneok Partners LP, a subsidiary of Tulsa-based Oneok Inc., and Gov. Jack Dalrymple announced Tuesday that the company intends to invest up to $780 million on projects that include infrastructure upgrades, an expansion of a pipeline and a new factory capable of processing about 200 million cubic feet of natural gas daily, or double the amount of any of its existing plants in the state.

Oneok officials made the announcement at the state Capitol in Bismarck with Dalrymple, who thanked the company and called its plans a needed and “remarkable capital investment.”

Oneok already operates four natural gas processing factories in North Dakota, and has two more under construction that are slated for completion late next year and early 2015. The seventh, called the Lonesome Creek plant, will be located 12 miles west of Watford City, in McKenzie County.

The plant, once completed in late 2015, will bring Oneok’s total processing capacity in North Dakota to 800 million cubic feet per day, the company said.

North Dakota’s booming oil production has led to an unmanageable increase in the state’s output of natural gas. About a third of the state’s natural gas production is now burned off and wasted because the pipeline network needed to transport the fuel to processing plants is not fully developed.

“We are committed to being part of the solution,” Oneok Partners President Terry Spencer said.

The Lonesome Creek plant is expected to cost between $320 million and $390 million, the company said. Spencer told The Associated Press that construction costs “vary significantly in North Dakota because of the weather.”

Spencer said more than 300 jobs will be created during the plant’s construction. Once completed, the company will employ about 250 people in the state, he said.

Oneok said it plans to invest up to $290 million for upgrades to existing infrastructure in the state. The company said it also will be investing $100 million to expand its 600-mile pipeline to Colorado. The expansion will boost the pipeline’s capacity from 135,000 barrels of liquid natural gas daily to 160,000 barrels. Natural gas produced from the Bakken and Three Forks formations in North Dakota also is rich in liquids that can be converted into fuels such as butane and propane.

Oneok said it will have invested more than $6 billion in projects through 2016 in the Williston Basin, which includes Montana and North Dakota. Spencer said about 80 percent of the company’s infrastructure is in North Dakota.

Oneok also announced Tuesday a $250,000 donation to the North Dakota Heritage Center on the state Capitol grounds in Bismarck.