Veresen, Enbridge to build Tioga Lateral natural gas pipeline

Veresen Inc. and Enbridge Inc., joint owners of Alliance Pipeline, will build a 120-MMcfd natural gas pipeline lateral and associated facilities to connect production from the Hess Tioga field processing plant in the Bakken region of North Dakota to the Alliance mainline near Sherwood, ND.

Alliance has executed a precedent agreement with Hess Corp. as an anchor shipper on the Tioga Lateral pipeline, including matching capacity on the Alliance mainline. Hess is expanding its Tioga plant to 250 MMcfd from 110 MMcfd, with engineering design to be completed second-quarter 2012 (OGJ Online, May 24, 2011).

The 77-mile Tioga Lateral will transport liquids-rich natural gas to NGL processing facilities owned by Aux Sable Liquids Products at the terminus of the Alliance mainline system. Through the agreement with Hess, Alliance has secured sufficient commitment to proceed with the Tioga Lateral and will hold an open season to solicit additional shipper interest. The pipeline can be expanded based on shipper demand.

Enbridge said the Tioga Lateral, in combination with the recently acquired Prairie Rose Pipeline and Palermo Condensate Recovery Plant (previously known as the Stanley Gas Plant), would allow it to attract additional gas volumes to Alliance and Aux Sable.

Aux Sable (owned by Veresen, Enbridge, and Williams Partners LP) and Hess have reached a concurrent agreement for the provision of NGL services. The partners expect the Tioga Lateral to enter service third-quarter 2013, subject to regulatory and other required approvals.

Enbridge announced plans last year to develop a pipeline delivering NGLs from the Marcellus shale to Aux Sable (OGJ Online, Mar. 24, 2010).

Contact Christopher E. Smith at chriss@ogjonline.com.

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