The Next North Dakota Boom -- Capitalism -- The Bakken And NGLs -- August 2, 2014

Background:

• ONEOK press release, July 31, 2014
• Potential of NGLs in the Bakken, July 31, 2014
• Any number of RBN Energy articles linked at the blog on NGLs

The Bismarck Tribune is reporting:

Currently [the price of US natural gas] is hovering at about $4.50. Extracting the layers, or molecules, can become complex and specific quite quickly, but the overall concept is something the average person can grasp.

"You don't need to review your chemistry to understand it, but, the way to think about it is in a cubic-foot of natural gas produced in the Williston Basin you will find somewhere around 8-12 gallons of raw natural gas liquids," John Gibson, former CEO, ONEOK and non-executive chairman of the Board, ONEOK Partners said. "That's ethane, propane, butanes all mixed up. If you go down into Oklahoma or the Texas in the pan handle, that same cubic foot will have say, three gallons per MCF. As you can tell by the numbers there is a whole lot of natural gas liquids in the Williston Basin."

Reports from the Energy Information Agency reinforce Gibson's testimony that Bakken offers some of the richest NGLs in the country. Breaking down the NGL market even further, each well drilled contains a great deal of ethane, propane, butane and natural gasoline, which can be stripped out, fractionated and put into the gas pipeline network. This process is not necessarily new in oil and gas, but is relatively new to North Dakota.

 "With respects to the Marcellus and other shale plays that are offshore, the NGL technologies are proven but the locations are new," Don Bari, Vice President, Technology and Analytics Groups, IHS Chemical, said. "All the infrastructure is already set up in the Gulf so that has had an early influence."