July 7, 2010

New oil pipeline to be built in county

By Tina Foreman
Farmer Staff Writer

Oil is big business in western North Dakota, and the biggest challenge continues to be moving the oil out of North Dakota.
Quintana, a Houston, Texas-based company has a proposal that could ultimately help to move some of North Dakota’s oil out of the state.
Quintana is proposing to construct an on-ramp of sorts that would allow oil from North Dakota to connect with the Keystone XL Pipeline, a crude pipeline project currently under development by TransCanada.
“The Keystone XL pipeline runs through Montana, but that is as close as it gets to the Bakken and Three Forks activity in North Dakota,” says Tony Clark, North Dakota Public Service Commissioner. “Quintana wants to build a pipeline from western North Dakota that would hook up with the Keystone XL pipeline in Montana.”
According to Quintana’s letter of intent to the North Dakota Public Service Commission, the company is proposing to construct pipeline facilities consisting of a header system that collects crude oil from existing truck stations and gathering systems, as well as at least one proposed gathering system, located in Mountrail, McKenzie, and Williams counties, and a trunkline to transport such collected crude oil to an interconnection with the Keystone XL Pipeline System in Fallon County, Montana. The header portion of the pipeline system will consist of approximately 110 miles of 10-inch and approximately 55 miles of 12-inch steel line for the transportation of crude oil originating from at least six receipt points, four points northeast of Watford City and two points northwest of Watford City. The header system will deliver crude oil to a main trunkline originating at Watford City. The trunkline will consist of approximately 145 miles of 16-inch steel line traversing McKenzie, Billings, Stark, and Golden Valley counties, and will transport the crude oil collected from Watford City to an interconnect with the Keystone XL Pipeline System in Fallon County, Montana.
The proposed trunkline is designed to initially carry up to 100,000 barrels of oil per day, with expansion capability of up to 120,000 barrels of oil per day. The system design contemplates significant storage at the connection to the Keystone Pipeline System to allow for batch deliveries. The crude oil will ultimately be delivered to major marketing and trading points in Cushing, Oklahoma or Nederland, Texas. The pipeline will allow for other possible interconnects with crude oil pipelines in the Baker, Montana, area and locations along the pipeline route in North Dakota.
“The letter of intent is a way for people to give the PSC a heads up that they are planning to start a project,” adds Clark. “In this case, Quintana proposed that we shorten the standard one-year waiting period between filing a letter of intent and a siting application to three months.”
On June 30, the PSC did okay Quintana’s request to shorten the waiting period, but Clark says that this project is still in the planning stages, with the next step being the siting application, which would allow the PSC to see exactly where the pipeline would lay so they could approve or deny the proposal.
Quintana estimates that the total cost of constructing the pipeline will be approximately $250 million, with construction estimated to begin on or before June 2011, with a proposed completion date of March 2013.
“The hope of Quintana is that this pipeline would help to move the Bakken and Three Forks production along at a faster pace, while also helping to increase the price for oil in North Daktoa,” adds Clark.