Bakken Briefs

Hess reopens Tioga gas plant

Hess Corp. completed the expansion of its Tioga Gas Plant in northwestern North Dakota.

The expanded plant, which services natural gas produced from the Bakken tight oil formation, was fully operational in late May and processing about 120 MMcfd. Output was expected to ramp-up to 250 MMcfd, and could rise to more than 300 MMcfd.

Prior to the expansion, the plant processed only 100 MMcfd.

Gov. Jack Dalrymple numbered among the state officials present at a ceremony to commemorate the opening of the expanded plant on May 19. Dalrymple called the expansion "an example of what we need to see, which is more capturing of natural gas and more added value to the product."

The expansion of the Tioga Gas Plant will reduce the amount of natural gas flared at Hess's Bakken operations to 15-20% from about 25% before the plant was shut down for construction work.

Natural gas production in North Dakota has risen sharply in recent years, in step with increasing oil production from the Bakken shale. However, the state lacks the midstream infrastructure needed to utilize all of the fuel.

Data from the North Dakota Industrial Commission show 33% of the state's nearly 1 bcfd of gas production was being flared in mid-May. State regulators earlier this year adopted a flaring-reduction plan that seeks to reduce flaring to 5% of gas production by 2020.

Hess is a leading operator in the Bakken, with more than 640,000 net acres. The company is running a 17-rig drilling program this year and expects net production for the full year will average from 80,000-90,000 boe/d.

Greg Hill, president and chief operating officer for Hess, said the Bakken will be the single biggest contributor to the company's production growth during the next 5 years. "We expect that by 2018, we'll be producing 150,000 barrels of oil equivalent per day from the Bakken," Hill said.

Hess plans to invest more than $1.5 billion in North Dakota infrastructure projects from 2012 to 2014.

North Dakota output tops 1 million b/d

North Dakota has surpassed 1 million b/d of production on the strength of increasing output from the Bakken shale.

April figures were released in June by the state's Department of Mineral Resources. State-wide production had been closing in on 1 million b/d for months, but growth had been hampered by a severe winter. The state now accounts for 12% of US oil production.

Only four other US states-Alaska, California, Louisiana, and Texas-have ever surpassed the 1 million b/d mark, and of those only Texas still produces above that level.

Ron Ness, president of the North Dakota Petroleum Council (NDPC), said the achievement places North Dakota among the top 20 oil producers in the world. Besides North Dakota, only Texas, one Canadian province, and 19 countries now produce more than 1 million b/d.

"This is a significant milestone that few countries and even fewer states have ever reached, underscoring the influence North Dakota has in enhancing our national security and our state and national economies," Ness said.

The Bakken is the tenth oil field in the world to surpass production of 1 million b/d, NDPC said. Other oil fields that have obtained this distinction include: Ghawar in Saudi Arabia, Burgan in Kuwait, Cantarell in Mexico, Daqing in China, Samotlor in Russia, Kirkuk in Iraq, Prudhoe Bay in Alaska, and the Eagle Ford shale and Permian basin in Texas.

The mature portion of the Bakken covers 15,000 sq miles in the northwestern portion of North Dakota, according to the North Dakota Industrial Commission. As of June, 188 rigs were active in the state, and 7,200 wells were producing from the Bakken. Drilling activity is concentrated in Montrail, Dunn, McKenzie, and Williams counties.

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