HUGE! HUGE! The ONEOK Garden Creek Natural Gas Plant Northeast of Watford City Is Operational - The Bakken, North Dakota, USA

Update

January 21, 2012: article in the Williston Herald; some data points

• should reduce flaring significantly
• the Garden Creek Facility outside of Watford City (to the northeast) is the second ONEOK facility in the region constructed so far; two more are being constructed
• the first: the Grasslands natural gas processing facility
• the four will nearly quadruple ONEOK's processing capacity in the region
• see data points below regarding capacity and potential; I suggested that additional plants were possible; this article confirms it: ONEOK may continue to build processing plants in the region
• earlier: these three new plants remove flaring from 750 wells; 2,000 wells/year are being drilled
• this article: these three new plants -- 300 mmcfpd, but over the next couple of years, in excess of 500 - 750 mmcfpd
• the governor noted that folks don't ask about the weather any more in North Dakota; they ask about the climate -- the business climate

Same day: In one of the stories linked below, Lynn Helms is quoted as saying:

Oil and Gas Division director Lynn Helms said there are roughly 1,000 wells flaring across the oil patch now. "These plants will take 750 off the landscape," he said. New wells and flares, however, are continually coming on at the rate of 2,000 new oil wells or more per year.

It's a bit unclear, but the quote suggests the three (3) natural gas processing plants can process the natural gas from 750 Bakken wells, or one plant can process natural gas from 250 Bakken wells.

[Interesting bit of trivia: back in 2010, the Bismarck Tribune noted that of the 5,300 wells producing in North Dakota, only 720 were flaring.]

If 2,000 wells are being added each year, that works out to another six (6) identical processing plants. And that would go on year after year -- except for the fact that the natural gas, I believe, tapers off fairly quickly over time compared to how long oil production can last. But this is getting beyond what I know. 

Original Post

Link here from Oil and Gas Journal. I don't think these links stay up forever.

Open house, as reported in the Bismark Tribune; 

Data points:

• Garden Creek natural gas processing plant in eastern McKenzie County, northeast of Watford City
• Is now receiving production  from the Bakken
• This is part of the initial $1.5 to $1.8 billion --- that's "billion" with a "B" -- for Bakken shale projects, 2012 - 2014 for NGL -- this is a huge story
• Garden Creek: 100-MMcfd gas processing plant
• ONEOK building two more such plants: Stateline I and Stateline II west of Williston in Williams County
• ONEOK will also construct a 500-mile Bakken pipeline -- no State Department approval necessary
• The pipeline will be completed by 1H13
• Stateline I and Stateline II to be completed by 3Q12 and 1H13, respectively

I did not understand any of this when first announced. But then I took a pre-dawn drive out to Garden Creek one Saturday morning and was blown away (figuratively) by what I saw; I stumbled upon Stateline I and II accidentally. Having mis-reported some information early on, readers corrected me and with that information plus seeing all the sites first hand gave me a huge appreciation for what ONEOK is doing in the Bakken.

One company: $1.5 to $1.8 billion over two years -- huge.

The Bakken is not a natural gas play. It is estimated that the natural gas in the Bakken represents four (4) percent of the economic value of the Bakken; 96% if represented by sweet, light oil. And that's just the Bakken.

Yes, these are still eye-popping stories for me.

For more background on the ONEOK projects and comparison with Hess' Tioga natural gas processing plant, click here. 

From the Bismarck Tribune story linked above:

Oil and Gas Division director Lynn Helms said there are roughly 1,000 wells flaring across the oil patch now. "These plants will take 750 off the landscape," he said. New wells and flares, however, are continually coming on at the rate of 2,000 new oil wells or more per year.

Spencer said Friday's low price of natural gas is offset by a much-better price for natural gas liquids, which are split off at the plant into a separate stream and processed into propane, butane and gasoline in a fractionation facility in Kansas.

He said natural gas from the Bakken is "very liquids rich," so the split stream is about half and half.

Spencer said oil producers are invested with his company in a mutual alignment contract, so both the gas producers and Oneok absorb the market shift equally.

The company's three plants and pipeline facilities will amount to a $1.8 billion investment and 160 employees when it's all one line.

The Garden Creek Gas Plant is about eight miles northeast of Watford City and its Mayor Brent Sanford said it gets us "a good jump along the road" of using, not wasting natural gas.

Stateline I and II will be west of Williston; Stateline I is now well on is way to completion.