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As Oil Production Grows, New Construction Expected

Courtesy of Bismarck Tribune


As North Dakota oil production is poised to hit a record this year, the industry has major infrastructure challenges ahead. Reducing natural gas flaring is the most pressing obstacle as increasing volumes of natural gas production strain existing pipelines and natural gas processing capacity.

Industry leaders say construction in the Bakken is expected to increase in 2018 in response to the infrastructure needs and stronger oil prices.

“We know that infrastructure development slowed substantially over the past three years because of extremely low commodity pricing,” said Ron Ness, president of the North Dakota Petroleum Council. “You’re starting to see some investment back in the Bakken in recognition that its economics have improved so much.”

Ness added that the Dakota Access Pipeline has made transportation costs more competitive and technology advancements have improved well performance.

North Dakota produced an average of more than 1.17 million barrels per day in January, about 52,000 barrels per day shy of the record 1.2 million barrels set in December 2014.

The growth of oil production could be tempered, however, if the industry can’t keep up with capturing and processing natural gas. The state frequently breaks records with natural gas production, with nearly 2.07 billion cubic feet per day produced in January. That month, companies flared 310 million cubic feet per day of natural gas.

To address this challenge, the Petroleum Council has reinstituted its gas capture and infrastructure development task force with more than 60 people participating, Ness said.

Several projects have recently been announced, including a natural gas liquids pipeline and expansions of natural gas processing plants.


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