I Can Help - How ONEOK's New Elk Creek NGL Pipeline Makes Things Better in the Williston Basin

Much as production growth in the Permian required the development of new pipeline capacity to take away crude oil, natural gas and NGLs, increasing activity in the Williston Basin has spurred the need for incremental capacity to move all three of the energy commodities out of western North Dakota and eastern Montana. For NGLs, the recent start-up of ONEOK’s Elk Creek Pipeline has been the answer to producers’ prayers — not just in the Williston Basin (home of the Bakken formation), but also in the Rockies’ Powder River and the Denver-Julesburg (D-J) basins, through which the new, 240-Mb/d pipeline passes on its way to Bushton, KS. Elk Creek’s timing couldn’t have been better: it came online just as a number of new gas processing plants entered commercial service in the Williston Basin, and just in advance of possible Btu restrictions on the all-important Northern Border gas pipeline that may force cutbacks in ethane rejection. Today, we explain why the Elk Creek NGL Pipeline helps resolve a number of challenges Bakken producers have been facing.

As we discussed in a few recent blogs, Here We Go Again and The Battle Rages On among them, increased drilling-and-completion activity in the Williston Basin has resulted in record-shattering production of crude oil and associated gas there, and the development of new crude-pipeline and gas-processing capacity to try to keep pace. And with that new processing capacity — 710 MMcf/d this year alone — has come increasing flows of mixed NGLs that need to be either fractionated into so-called “purity products” locally (and there is only a small amount of fractionation capacity in North Dakota) or piped to distant fractionation centers in Bushton or Conway, KS, or Mont Belvieu, TX.

For a time, Williston Basin producers and midstreamers managed to get by using the NGL takeaway capacity that was already in place, primarily ONEOK’s 140-Mb/d Bakken NGL Pipeline (orange line in Figure 1). Bakken NGL flows mixed, unfractionated NGLs (a.k.a. y-grade) south into ONEOK and Williams’s jointly owned 245-Mb/d Overland Pass Pipeline (green line), which runs from the Powder River and D-J to Conway. When ONEOK announced plans for the new Elk Creek Pipeline almost two years ago, it said the Bakken NGL and Overland Pass pipelines were running at or near capacity — an assertion backed up by data from the Energy Information Administration (EIA). Elk Creek Pipeline (blue line), which started flowing y-grade earlier this month, is a biggie. Twenty inches in diameter and about 900 miles long, with an initial capacity of 245 Mb/d (expandable to 400 Mb/d), the pipe originates near ONEOK’s Riverview terminal (purple triangle) in Richland County, MT, runs south through the eastern edges of Montana and Wyoming, then cuts across the northeastern corner of Colorado on its way to Bushton. The pipeline is anchored by 10-to-15-year contracts totaling about 100 Mb/d, primarily with minimum volume commitments, or MVCs.