New "Operator" In The Bakken -- Huge Story -- January 8, 2020

Updates

January 10, 2020: origination, eastern Williams County, puts this pipeline gathering system beginning south of Tioga/Ray. The oil fields in this area: Beaver Lodge, Capa, Alkali Creek. Hess has a huge presence in that area and when I think of Hess, I think natural gas. CLR, of course, also has a huge presence there. The new plant is said to be west of Williston; I can't imagine the plant being much more than 10 miles to the west of Williston, probably on the north side of the highway. The Montana state line is only 18 miles from Williston (probably less now that Williston has expanded). So, for now, my guess is somewhere along County Road 1, near its intersection with County Road 4 (54th Street NW). If I recall correctly, the new Williston airport is off 58th Street NW.


January 10, 2020: the reader who first alerted me to this story added this comment today:

On reflection, the Outrigger gas plant just seems to be part of a bigger project, specifically for ethane. 

Why would any project make ethane cryogenic separation part of it? 

Ethane has no value for long distance transfer for ONEOK as it would lose money for the pipeline. But that is not true for ethylene. Ethylene just started to be exported from Texas and is priced higher. 

What if all the ethane going into the pipeline was converted first? The pipeline contents would be elevated in price and smaller amounts could be further processed in ND.

January 10, 2020: a quick look at using cryogenic separation for NGL extraction.

January 10, 2020: gas processing and fractionation. 

Original Post

Huge thanks to a reader for alerting me to this story. This is huge, perhaps the biggest energy story in the Bakken this week.

Links:

Outrigger Energy.

Outrigger Energy II LLC is a private, full service midstream energy company specializing in greenfield project development with current systems operating and under construction in the DJ and Williston Basins. The company was formed in 2017 after Outrigger Energy LLC sold its assets to Targa Resources and Tallgrass Energy Partners.

Outrigger deal with XTO to expand Bakken midstream infrastructure. Paywall.

Private midstreamer Outrigger Energy II LLC has agreed to provide long-term natural gas gathering and processing services to a subsidiary of supermajor ExxonMobil Corp to assist in developing Williston Basin assets in North Dakota.

Business Wire, press release:

Outrigger Energy II LLC announced today that it has entered into a long-term definitive gas gathering and processing agreement with XTO Energy, Inc. to service XTO’s production in Williams County, ND.

The gathering system will comprise a 70-mile, 20- and 24-inch diameter, rich gas pipeline originating in eastern Williams County and terminating at a new 250 MMcfd cryogenic gas processing plant located west of Williston, ND.

Plans are also underway for a plant expansion of up to an additional 200 MMcfd, for total gas processing capacity of 450 MMcfd.

Outrigger will construct, own and operate the cryogenic processing plant and gathering system. The high efficiency plant features ethane recovery and rejection capabilities that will provide direct market access to the Northern Border Pipeline system for residue gas and the ONEOK NGL pipeline system for natural gas liquids.

Future NGL fractionation facilities may be added to provide finished NGL products for local markets.

Dave Keanini, Outrigger’s CEO, stated, “We are grateful XTO has entrusted Outrigger to build a gathering system with substantial capacity and state-of-the-art facilities that will assist XTO with execution of its significant development plans in Williams County. Routing of the gathering line will provide other Williston Basin operators access to much needed gathering and cryogenic processing capacity. Moreover, this additional midstream capacity for gas production north of the Missouri River allows the State of North Dakota to make strides towards its goal of minimizing gas flaring in the Basin. Over the last six years, the Outrigger team has achieved an excellent track record of project execution, safe and reliable operations and customer service in the Delaware, Midland, Powder River and DJ Basins, and we couldn’t be more excited for the opportunity to do the same in North Dakota.”