Pipeline upgrade set for completion this week

AP News
|
Posted: Dec 28, 2009 5:15 PM

A pipeline company's project to carry more crude oil from western North Dakota and eastern Montana is set to be completed Friday, state and industry officials said.

Enbridge Pipeline North Dakota LLC has upgraded 11 pumping stations in North Dakota along a pipeline that runs from northwestern North Dakota to Clearbrook, Minn., said Justin Kringstad, director of the North Dakota Pipeline Authority.

The expansion will increase pipeline capacity from 110,000 barrels per day to 161,600 barrels per day, Kringstad said.

"More horsepower was done at the pump stations to push more product through," Kringstad said.

Enbridge officials did not immediately return telephone calls Monday. The company announced the expansion in 2007, and have pegged the price of the project at $120 million.

Because of the increased distances to market, North Dakota sweet crude generally fetches about 10 percent less than a barrel produced elsewhere and sold on the New York Mercantile Exchange.

North Dakota has only one oil refinery, the Tesoro Corp. plant near Mandan.

The state's current production is more than 240,000 barrels daily, and accounts for about 2 percent of total U.S. crude oil production. Officials estimate North Dakota could hit 350,000 barrels of oil daily by late 2011, if crude prices hold.

North Dakota's oil patch is projected to produce about 80 million barrels of oil in 2009, up from a record 62.8 million barrels last year.

Kringstad said Enbridge has more than doubled its capacity for moving North Dakota crude since 2007.

Ron Ness, president of the North Dakota Petroleum Council, said Enbridge's project is a big infrastructure improvement for the industry.

"Every addition helps, but we know it's not likely enough _ we're going to need more," Ness said.

Kringstad said Enbridge has proposed expanding its pipeline network to increase capacity by 30,000 barrels in 2011, and another 115,000 barrels by 2012.

"The capacity is adding up fast," Kringstad said. "It's definitely needed."