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Tuesday, September 17, 2013

Update On Additional Natural Gas Takeaway Capacity For Burke, Mountrail Counties; Aux Sable's Prairie Rose Pipeline, and Summit Midstream's Alliance Pipeline; Increases Local Takeaway Capacity By Almost 50%

Related headlines:
More takeaway capacity for North Dakota natural gas identified.

The Prairie Rose Pipeline, owned by Aux Sable, Calgary, with origins in Burke and Mountrail County, will feed natural gas from these two counties into the Alliance Pipeline, owned by Summit Midstream Partners; this pipeline is 2,300 miles long and runs from western Canada to the Chicago hub.

Capacity:
  • Current agreement: 17 million cubic feet/day
  • New agreement: 25 million cubic feet/day
 That's almost a 50% increase in one pipeline system.

According to the September, 2013, Director's Cut, North Dakota produces slightly less than 1 million-thousand OR 1 billion cubic feet/day. So, if I did the math correctly (and that's a huge "if), the 25 million cubic feet represents about 2.5% of the total amount of natural gas produced in North Dakota on a daily basis. Again, I make a lot of math errors, and millions/billions cubic feet of natural gas continues to confuse me.

The Bismarck Tribune is reporting:
Calgary-based Aux Sable Midstream LLC and Summit Midstream Partners LP of Dallas said up to 25 million cubic feet of natural gas daily will be sent from Burke and Mountrail counties along a 2,300-mile pipeline system. Alliance Pipeline Ltd.'s pipeline runs from western Canada to the Chicago hub, where the gas is sold to Midwest and East Coast markets. In North Dakota, the pipeline is fed by the Prairie Rose Pipeline owned by Aux Sable.
Summit spokesman Marc Stratton said about 17 million cubic feet of North Dakota natural gas is being shipped at present under an existing pact that has been in place since late 2011. Stratton said work is being done by Summit to bump the gathering capacity of natural gas in western North Dakota to about 30 million cubic feet daily by mid-2014.

3 comments:

  1. That sounds like a company trying to make their numbers appear larger. It is only 15k Dth of additional capacity. They never said how long their pipe is, only that it is going into a system of 2,300K miles of pipe. AND now way in hell this makes it to a East coast market.

    ReplyDelete
    Replies
    1. It's an increase of almost 50% of their current capacity (from 17 million to 25 million) in this little pipeline. For mineral owners in Burke County and Mountrail counties, these announcements are very, very good news. Folks following developments in the Bakken know that operators have delineated the Bakken and are now drilling where it makes most economic sense. If the pipelines are in place, it makes more economic sense to drill there than where pipeline are not in place.

      I believe the related links provide the length of the pipeline, which might be all of 77 miles long.

      This is a reporter writing the story, not the press release. All these additional increments of takeaway capacity help. According to the article, the natural gas will get to the Chicago hub. When I was growing up, everything east of the Mississippi was "east coast." Smile.

      There are a number of story lines here: the most important is the takeaway capacity; I post these stories for my benefit to help me understand the development of the Bakken.

      Second, all things being equal, this is 8 million cubic feet of natural gas each day that won't be flared (not trivial). Every little bit helps.

      Thirdly, for folks investing in the stock market, one has only to look at the related links to see which companies will benefit from this announcement.

      I think it's a bigger story than many folks realize.

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    2. By the way, I agree: the 2,300-mile figure was a gee-whiz figure. I could/couldn't care less how long the pipeline is/was. But I would be interested in where it started, where it ended. The number of miles did not matter.

      However, I think one needs to understand the audience. North Dakotans, as a rule, are interested in distance. In wide open spaces, distances mean something, and it would be natural to include the length of the pipeline. Had they not included the length, people would have said, "Wow, from western Canada to Chicago, that must be one long pipeline." Well, now we know how long.

      Also, with all the attention that the Keystone XL gets, this puts the Keystone into perspective. The Keystone is not all that unique; there are a lot of pipelines that are very, very long, and there are a lot of pipelines that already run from Canada to Chicago.

      I think there were quite a few story lines in that short story.

      I'm glad you took time to point some of them out. Thank you. Until you wrote, I had not given it much thought. Then, as you can see, I became obsessed with the data point. I've learned a lot.

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