Hess Corp. and North Dakota officials gathered Monday to mark the recent completion of an expansion of the company's natural gas processing plant that will help cut the amount of gas production wasted through flaring and boost NGL production.
The expanded plant near Tioga is now processing about 120,000 Mcf/d, Hess said, adding that with its and third-party gas that will rise to at least 250,000 Mcf/d, with the "potential to increase beyond 300,000" Mcf/d.
US Senator John Hoeven, Republican-North Dakota, who attended the event, said in phone interview that the project is an example of "taking a challenge and turning it into an opportunity.
The expansion will help the state increase its production of NGLs while it reducing the amount of Bakken Shale gas that is flared, which currently stands at about 30%, Hoeven said.
"It's taking the natural gas that's being flared off in the Bakken and capturing it and processing it," he said.
In addition, the expansion has for the first time opened a market for the export of ethane from North Dakota to Alberta, Canada, Hoeven said.
Earlier this month, Calgary-based Mistral Energy said it has started shipping purity ethane to Canada from the US on its Vantage Pipeline. The average volume in the early months of operation is expected at 10,000-20,000 b/d, company officials said.
The pipeline moves purity ethane from Tioga through Saskatchewan and terminates near Empress, Alberta, where it will be used as feedstock for ethane crackers operated by Nova Chemicals at its main manufacturing center at Joffre, Alberta.
"This is an example of where we got a pipeline approved. We worked with Hess and Nova and our State Department as well as Canadian authorities to get the pipeline approved last July," Hoeven said.
The 430-mile, $300 million pipeline eventually will have the capacity to transport 40,000-60,000 barrels of ethane per day, he said.
Hoeven added that the Hess plant expansion represents about a $1 billion investment, while the firm invested about half that much to build systems "to gather the natural gas and get it to the plant."
"Since 2010, we have invested more than $10 billion in North Dakota, where we currently have a 17-rig drilling program with 2014 net production expected to average 80,000 to 90,000 barrels of oil equivalent per day," CEO John Hess said in the statement.
Hess said its spending in the state has led to a sharp increase in the production of NGLs, including propane, methane, butane and natural gasoline, and ethane, which had never been commercially produced in the state.
The expansion also reduces the percentage of natural gas flared at Hess's operations to about 15-20% from about 25% before the plant was shut for the expansion work, Hess said.
The Tioga plant was built in 1954, three years after Hess drilled the first oil well in North Dakota. Hess has 640,000 net acres in the Bakken where it forecasts full-year 2014 production of 80,000 barrels of oil equivalent per day to 90,000 boe/d.
