Pipeline and refinery construction projects will constrain North Dakota oil exports in coming months, the state’s chief oil and gas regulator told lawmakers Wednesday. Oil companies will not expand drilling plans by buying or bringing in more drilling rigs until the constraints have passed in early 2010.
North Dakota’s director of the state Department of Mineral Resources indicates that they should still be able to produce and transport 160,000 barrels of oil per day selling at $97 per barrel. The state in May 2008 was producing more than 156,000 barrels per day, and in June its price peaked at more than $136 per barrel before trending down along with the world price drop. If production goes higher, the extra oil likely will sell at a steep discount, he said. “We’re working on some ways out of this,” he said. Plans are being made to ship by rail oil that would normally be in the Enbridge line.
And, Helms said, his office is doing everything possible to help the Mandan Hidatsa Arikara Nation build its new refinery on the Fort Berthold Indian Reservation.
The Enbridge pipeline, a major outlet for North Dakota oil running from near Williston, N.D., to Grand Forks and beyond, will shut down soon for pressure testing, in preparation for an upgrade project, in which it will go from a capacity of 110,000 barrels per day to 160,000 barrels per day. Its capacity will be reduced during the upgrade construction. It is a $120 million expansion project.
The Phase 6 expansion, now moving to North Dakota, the Phase 6 expansion on slide 13 of our North Dakota System is waiting regulatory approvals, which we anticipate will be received on a timely basis so that the 51,000 barrels per day of incremental capacity will be available by early 2010.