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Dakota Access Pipeline capacity expansion could move 1.1 million barrels per day, operator says

The operator of the Dakota Access Pipeline is planning to expand capacity, though without adding more pipeline. Tom Stromme / Bismarck Tribune1 / 2
North Dakota Pipeline Authority Director Justin Kringstad gives an update of oil and gas pipeline figures to members of the North Dakota Industrial Commission on Thursday, June 20 in the state Capitol. At right is Agriculture Commissioner Doug Goehring, a commission member. Tom Stromme / Bismarck Tribune2 / 2

BISMARCK — The operator of the Dakota Access Pipeline is planning to nearly double its capacity, to a point where it could transport nearly all of the daily oil production of the nation’s No. 2 producer. The plans include new pumping stations in three states.

Energy Transfer Partners informed North Dakota regulators that it plans to expand the pipeline capacity from more than 500,000 barrels per day to as much as 1.1 million barrels.

An increase “will allow Dakota Access to meet the growing demand from shippers by optimizing and fully utilizing the existing pipeline infrastructure, without the need to install new pipelines, and without the need for shippers to use less safe and efficient means of transportation, such as rail," Energy Transfer attorney Lawrence Bender said in a letter to the Public Service Commission dated Wednesday.

North Dakota produced 1.39 million barrels of oil per day in April. The record was 1.4 million barrels per day in January.

The $3.8 billion pipeline takes oil from the Bakken through South Dakota and Iowa to a connection with the Energy Transfer Crude Oil Pipeline, which transports oil from Illinois to Nederland, Texas. It began operating in June 2017 after years of construction marred by large-scale and prolonged protests in North Dakota by opponents.

Energy Transfer Partners CEO Kelcy Warren said last August in Bismarck that the company was working to expand the pipeline’s capacity. At the time, it was carrying about 500,000 barrels per day. It's now carrying 570,000 barrels daily, according to Energy Transfer spokeswoman Lisa Dillinger.

Conditions of the permit through the North Dakota Public Service Commission allow Dakota Access to ship up to 600,000 barrels per day in North Dakota. Companies can expand the capacity of a pipeline by adding additional pumping horsepower or using drag-reducing agents that allow more oil to flow.

Energy Transfer plans to use additional horsepower. Work planned at a tank terminal near Johnsons Corner in northwestern North Dakota will include the addition of two 6,000-horsepower mainline pumps, along with other enhancements including a 300,000 barrel-capacity tank, according to a filing from Charles Frey, vice president of engineering for Energy Transfer subsidiary Dakota Access LLC.

Information provided by the company states Energy Transfer also will "purchase property outright for three new mid-point pumping stations; one each in North Dakota, South Dakota and Illinois."

The work in North Dakota alone is expected to cost up to $40 million.

It's unclear whether Energy Transfer will need PSC approval to expand capacity. Commissioner Julie Fedorchak said no permission is needed if the company does not plan to build outside of project footprint. The current planned work at the tank terminal near Johnsons Corner does not require state approval as long as the company follows conditions previously set by the PSC, she said. Energy Transfer as of late Thursday afternoon had not filed notice of a new pumping station.

It wasn't immediately clear what, if any, regulatory approvals Energy Transfer might need from other states or from federal officials. Dillinger did not specify, but said, "We will work closely with local, state and federal authorities to ensure we remain in full compliance with all applicable regulatory and permit requirements."

The company last October announced it was seeking commitments from shippers to transport more Bakken crude to the Gulf Coast. Information provided by the company Thursday said additional shipper commitments last fall "highlighted the continued market demand and need for additional capacity out of the Bakken."

News of Energy Transfer Partners’ plans came just days after two other companies announced they plan a new oil pipeline system to transport Bakken crude to Oklahoma.

Phillips 66 and Bridger Pipeline announced June 10 that they have formed a joint venture to build the Liberty Pipeline to transport growing volumes of crude oil from production areas in the Bakken and the Rockies. The Liberty Pipeline would transport oil from Guernsey, Wyo., to Cushing, Okla.

Bridger is proposing the Bridger Expansion to connect with Liberty, initially transporting up to 175,000 barrels per day from North Dakota to Guernsey, according to North Dakota Pipeline Authority Director Justin Kringstad. The exact route is still being determined, but a Bridger spokesman has said it would originate in southwest North Dakota.

If approved by regulators, the Bridger Expansion would be the first major crude oil transmission pipeline built in North Dakota since Dakota Access.