North Dakota natural gas pipeline nears completion

AP News
Posted: Dec 30, 2009 2:28 PM

A mid-January completion date is slated for a $45 million pipeline that will feed North Dakota natural gas into an existing line that moves the gas to Chicago.

The Prairie Rose Pipeline will transport some natural gas from the state's oil patch that is being flared, said Justin Kringstad, director of the North Dakota Pipeline Authority.

Pecan Pipeline North Dakota Inc., a subsidiary of EOG Resources Inc. of Houston, will transport natural gas about 75 miles from Palermo to Towner. It will hook up with Alliance Pipeline Ltd.'s pipeline, a 2,300-mile pipeline system that extends from western Canada to the Chicago hub, where the gas is sold to Midwest and East Coast markets.

EOG spokeswoman Elizabeth Ivers said the 12-inch pipeline initially will transport about 40 million cubic feet of natural gas from North Dakota's oil patch. The capacity will double by the end of 2010, she said.

Kringstad said 80 million cubic feet of natural gas is worth about $465,000 at current prices, and is enough to heat about 338,000 homes.

In 2008, nearly one-third of natural gas produced in North Dakota was flared as an unmarketable byproduct of oil production. The 26 billion cubic feet of natural gas that went up in smoke was about twice the annual gas consumption of the state.

State and industry officials say the amount of gas flared has decreased from 25 percent of total production to 11 percent in the past few months as the capacity has increased at processing plants in the state and as pipelines are being built.

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Less than 1 percent of natural gas is flared from oil fields nationwide, and less than 3 percent worldwide, according to the U.S. Energy Department's Energy Information Administration.

Kringstad said the Prairie Rose Pipeline among some $350 million in infrastructure improvements are either planned or under way in North Dakota to capture natural gas and move it to market.

The Prairie Rose Pipeline "will help tremendously," Kringstad said.