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ONEOK to add more natural gas processing in N.D.

BISMARCK — The largest processor of natural gas in North Dakota’s Oil Patch announced plans Wednesday to build another facility in the Williston Basin, which Gov. Jack Dalrymple said will help the state reach its goal of reducing natural gas flaring to 10 percent in six years.

ONEOK Partners President and CEO Terry Spencer said the Demicks Lake plant and related infrastructure in northeast McKenzie County will cost $605 million to $785 million to build and employ 30 to 40 people when completed in the third quarter of 2016.

The plant will be able to process up to 200 million cubic feet of natural gas per day, the same capacity as the Lonesome Creek plant in McKenzie County announced by Tulsa, Okla.-based ONEOK last November.

Construction is expected to start in about a year on the Demick Lake plant, which will be ONEOK’s seventh processing plant in the basin since 2010.

Spencer said the plant will sit about 15 miles northeast of Watford City, not far from ONEOK’s existing Garden Creek complex that includes the Garden Creek processing plant and Garden Creek II and III plants currently under construction.

“That’s in the fairway of a lot of intense activity,” he said.

ONEOK also plans to add natural gas compression at its existing plants in the Bakken to boost processing capacity by an additional 100 million cubic feet per day, to a total of 1.1 billion cubic feet per day. North Dakota’s overall natural gas output was nearly 1.2 billion cubic feet per day in May, the most recent figures available.

At a press conference with Spencer at the Capitol, Dalrymple noted that North Dakota will have expanded its natural gas processing capacity six-fold by 2016, from 200 million cubic feet per day in 2006 to 1.3 billion cubic feet per day. He said it’s all part of a “very ambitious” goal recently adopted by the North Dakota Industrial Commission to reduce natural gas flaring and boost capture to 90 percent by 2020.

“That does require major investments like this,” he said.

The percentage of natural gas flared in North Dakota dropped to 28 percent in May, down from a high of 36 percent but still well above the national average of around 1 percent for states.

Spencer said the Demicks Lake plant has been in development for many months and wasn’t a reaction to the state’s recent move to require oil companies to submit gas capture plans, which could trigger oil production curtailments if not met.

He said ONEOK has always had a high sense of urgency when it comes to the flaring issue, but added, “It may increase our sense of urgency.”

Mike Nowatzki

Mike Nowatzki reports for Forum News Service. He can be reached at (701) 255-5607.