Bakken Report: Plains finding niches in the Bakken

Everybody has a niche in the Williston basin’s Bakken petroleum system; Plains All American Pipeline found its’ by providing transportation in areas overlooked by midstream companies. So said Managing Director of Pipeline Commercial Operations James Pinchback at the North Dakota Governor’s Pipeline Summit held in Bismarck earlier this summer.

Plains is focusing on a small area in far north northwest North Dakota and northeast Montana where it has two pipelines and a multi-product rail facility currently under construction.

Bakken North pipeline

The first project Pinchback described was the Plains Bakken North pipeline, which is a 12-inch crude line that will run 79 miles from Trenton northwest to the Raymond Station near Outlook, Mont. At Raymond Station, the Bakken North will connect with the Wascana Pipeline, which is owned by the Plains Canadian affiliate and runs from Raymond Station north into Canada, terminating at Regina, Saskatchewan.

From Regina, the Wascana line connects to the Enbridge system which then transports oil to Clearbrook, Minn.

Pinchback said he believes there may also be an opportunity to connect with TransCanada at Regina to reach markets such as Patoka, but he said this will depend on how the Keystone XL project plays out.

Genesis of the Bakken North

Pinchback explained that back in 2005 to 2006, Plains was developing and expanding its existing Trenton gathering system on the Montana side of the Bakken, but “unfortunately the drilling kind of moved in a lot of different directions and the focus wasn’t really on our Trenton gathering system; it moved elsewhere.”

However, Pinchback said, Plains’ Trenton gathering system is still in place and serves as a type of core for the company because there are a number of producers in and around the area, and Plains is connected to other gathering systems coming into the Trenton area. He said it made sense for Plains to run a pipeline northwest out of Trenton into Canada due to increased activity in that direction.

So with the activity moving to the northwest from Trenton, Pinchback said Plains thought it would be a “pretty nice fit and provide a little niche pipeline option for folks that aren’t really being focused on for the expansions that are moving east and south.”

That thinking was the “genesis” of its Bakken North pipeline.

Bakken North status

Construction on the crude pipeline began in late May, Pinchback said, and Plains is on schedule for a December startup.

Plains is building an 80,000 barrel tank at Trenton as part of its new origination station scheduled to be completed in August, and it had no problems with its siting permits, and the right of way is nearly finished although the company is doing some minor rerouting.

Initially, the Bakken North line will have a capacity of 50,000 barrels per day to Regina, he said, but that capacity to Regina will be expanded to 75,000 barrels per day following some improvements on the Wascana line.

Getting back to Trenton, a hub with good connectability, Pinchback asserts, Plains has to develop a new station because it is outgrowing the capacity of the old station. The company has plenty of land, new truck unloads and pipeline connections coming in, he said, so in addition to its Bakken North line Plains can also provide options to Enbridge.

Moving up the Bakken North line, Pinchback said Plains has already selected a number of sites where it can build injection and origination facilities for producers and will see how the growth goes in developing these facilities.

Regarding shipper commitments, Pinchback noted that Plains didn’t do an open season nor has it taken any financial commitments because its management feels confident the volume will be there.

Manitou rail facility

“Everybody is building a rail facility, so we decided we would go ahead and build one as well,” Pinchback quipped as he changed the focus of his presentation to the new Manitou rail facility located west of Stanley. This facility, he said, is actually a “little bit more” than just a regular crude oil facility in that it also will have natural gas and natural gas liquids, or NGL, capabilities.

Between Stanley and the Rangeland rail facility, the Manitou facility is in a unique position because of the development in that corridor that “doesn’t really have a home,” Pinchback said. It’s a unique fit for the companies that have good projects in the corridor that need gas processing and crude movement, making it a niche market for Plains.

Manitou will have a unit train facility component scheduled to be completed by November, with the capacity to move 65,000 barrels per day, but the capacity can be expanded if necessary, he said.

The facility will have high-speed rail loading racks. Two 150,000 barrel tanks are currently under construction.

Dirt work is under way for the actual unit train tracks; however, Pinchback said, Plains has been trans-loading crude at the facility since fall 2011 and the company is currently moving between 12,000 and 15,000 barrels a day. The facility, he added, will provide a very nice delivery point for producers in “no man’s land” between rail facilities

The gas plant at the Manitou facility will consist of a cryogenic plant with fractionation.

Pinchback explained that Plains is still trying to determine if the capacity should be 50 million or 100 million cubic feet per day, but the plan is to have this plant online by the end of 2013.

He said this will be another marketing option for producers in the area that don’t have a lot of other options.

In concluding his discussion of the Manitou facility, Pinchback said it is a multi-port, multi-product facility that is unique in terms of its location.

Nelson Pipeline

The Nelson to Ross crude oil pipeline will be a 10-inch, 16.9 mile long line connecting to Plains’ Robinson Lake pipeline at Nelson and running west to the Manitou rail facility near Ross.

The Robinson Lake line runs north from Robinson Lake to Stanley and connects with Enbridge, but with the new Nelson line crude from the Robinson Lake area can go directly to either the Manitou facility or to Enbridge. Trucks will then be able to unload at Nelson eliminating the need for the additional highway miles to the Manitou facility.

Pinchback said the Nelson line will provide access to whatever crude markets want to come into the system at Stanley and at the south end of the Robinson Lake line, and that the Nelson line “saves a lot of pipeline miles not having to lay a new pipe all the way to Stanley every time you want to touch Enbridge.”

The Nelson line will have a capacity of 65,000 barrels per day, with construction slated to begin in late June, and the pipeline scheduled to be in service by November when the Manitou rail facility is complete.

Finding the right niches

“We’re not afraid to spend money; it’s just trying to line up with the producers and match where the growth is going to be so that you’re not just overbuilding everywhere,” Pinchback said in conclusion.

“Plains is open to suggestions,” and will continue to throw out options for moving product out of the area. It’s just a matter of “finding the right niches,” he said.


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