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Dakota, Part 3 - Enable Midstream and Crestwood's Bakken Crude Oil Gathering Systems

It’s been a good couple of years for many of the midstream companies active in the Bakken. Crude oil-focused drilling and completion activity has rebounded from a mid-decade slump, flows through their crude and gas gathering systems have been rising, and gas processing constraints that had threatened continued production growth have been on the wane. All that has led Bakken producers to plan for further gains in output in 2020 –– though that may change as the economic effects of the coronavirus become clearer. In any case, production growth is only possible if there’s sufficient gathering infrastructure in place to handle it. Today, we continue our series on crude-related assets in western North Dakota with a look at two midstreamers that have experienced big gains in their Bakken crude-gathering volumes.

As we said in Part 1, Bakken crude production has been rising steadily over the past three-plus years, topping its previous December 2014 peak of ~1.26 MMb/d in July 2018, then topping 1.4 MMb/d in October of that year and 1.5 MMb/d in October 2019. Not that there haven’t been challenges to that growth, including a shortfall in crude oil pipeline capacity out of the play — which was largely solved by the June 2017 startup of the Dakota Access Pipeline — and, more recently, the need for more gas processing capacity to handle the large volumes of associated gas emerging from Bakken wells with crude oil. Gas processing constraints are well on their way to being solved, thanks to the addition of a number of new processing plants in 2019 and early 2020, and the late-2019 startup of the Elk Creek NGL pipeline that will help folks deal with all the mixed NGLs coming out of those processing plants. In addition, we explained that while growth-oriented producers can get by for a while by trucking their incremental crude oil production to takeaway pipelines and crude-by-rail terminals, it is far more efficient and cost-effective for them to develop, expand and employ crude gathering systems. That’s especially true in the heart of the shale play in western North Dakota’s McKenzie, Dunn, Williams and Mountrail counties, which together account for nearly 90% of the Bakken’s ~1.5 MMb/d of current production.

In Part 2, we began our review of major crude gathering systems in the Bakken with a look at Hess Midstream’s pipelines and related assets. Owned primarily by Hess Corp. — a leading Bakken producer — and Global Infrastructure Partners, Hess Midstream owns and operates about 400 miles of crude oil gathering pipelines with a throughput capacity of 160 Mb/d, as well as two crude oil terminals, a crude header system and a big crude-by-rail facility.

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