News Releases for April 2006
April 19, 2006
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Hoeven, Legislators Working To Increase Pipeline Capacity In Williston Basin
Governor Also To Meet With Montana, Wyoming Governors
BISMARCK, N.D. – Gov. John Hoeven Tuesday met with legislators to review the state’s response to discounted crude oil prices in western North Dakota owing to a bottleneck in the pipeline capacity. Discounts on crude oil in the Williston Basin range from $8 to $25 because of competition for pipeline space.
Hoeven said North Dakota and western Montana currently produce about 200,000 barrels (bbls) of crude oil per day. In addition, there are about 35 drilling rigs in North Dakota and 30 in Montana to further expand production. Shipments are restricted, however, because existing pipeline capacity can’t accommodate increased production.
Enbridge, a principal pipeline, can accommodate 85,000 bbls a day, and the Tesoro refinery can take 55,000 bbls a day. Of the remaining 60,000 bbls a day, the Guernsey, Wyoming market, which serves Colorado refineries, can take only about 45,000 bbls a day because one of several primary refineries in Colorado is operating at a reduced capacity while the company upgrades its facilities. That leaves about 15,000 bbls a day that can’t be moved.
Hoeven, along with Department of Mineral Resources Director Lynn Helms, in the meeting with legislators from oil producing counties outlined steps the state is taking to address the issue.
- Denver’s Sunoco Refinery is scheduled to be back online on or about June 1, adding 10,000 bbls of capacity per day.
- An initial expansion of the Enbridge pipeline should be completed by July 1, and will add an additional 8,000 bbls a day. A second Enbridge expansion will add an additional 8,000 barrels per day by the end of the year. A third expansion will add another 14,000 bbls a day by July 1, 2007, for a total of 30,000 barrels.
- Hoeven has asked True Companies, another pipeline company, and Enbridge to modify and upgrade their infrastructure, which could make another 25,000 to 40,000 bbls a day capacity available within about a year.
- In the short term, Burlington Northern Santa Fe Railway Co. is taking steps to move oil by rail from Dickinson, and the Dakota Missouri Valley & Western short-line railroad is working to move tanker cars out of the Williston Basin.
- Longer term, the proposed Keystone pipeline project, which will take several years to complete, would provide additional capacity.
The Governor and legislators also agreed to hold a summit within the next month to meet with pipeline company representatives and assess the progress of their efforts.
Hoeven also plans to meet Wednesday afternoon in Billings, Mont. with Montana Gov. Brian Schweitzer, Wyoming Gov. Dave Freudenthal, Utah Lt. Gov. Gary Herbert and representatives of Canadian and U.S. pipeline companies. The Governor has already spoken with other governors about working to increase pipeline capacity and is meeting with them to seek their assistance in further expanding capacity to benefit the entire region.
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