Safety, Shale, Midstream Construction Discussed At Pipeline Opportunities Conference

By Rita Tubb, Managing Editor | July 2011, Vol. 66 No. 7

Luncheon keynote speaker Bruce Henning, vice president, Regulatory and Market Analysis, ICF International, offered an enlightened perspective on the abundance of natural gas and the many opportunities it offers.

Shale plays
In the day’s final session, speakers turned their attention to activity in the prolific shale plays around the nation and spending for gathering, processing, storage and pipeline developments.
ONEOK’s President of Natural Gas Gathering and Processing, David Scharf, offered an extensive overview of his company’s activities in the Bakken Shale along with a summary of the company’s footprint in the Williston Basin and some of the challenges faced in designing and operating facilities in that area as well.

Scharf said the Bakken is a very interesting shale play and “as the area’s largest independent processor and gatherer, we’re in a strong position to provide midstream capabilities and infrastructure.

Although the Bakken is known as purely a crude oil-driven play, he said there is also a fair amount of associated gas. “While this is a relatively small gas play, ONEOK is spending $1.6 billion in projects to accommodate just the gas in this basin alone.”

“With 90 percent of the value of the Bakken Shale reserves being crude oil,” he said, “the economics of drilling these wells is extremely strong. So much so, that wells are drilled and completed even with no place for the gas to go but be flared.

“Of course,” he said, “this is a terrible waste and ONEOK is working hard and spending a lot of capital to put those flares out as soon as possible. We’ve already expanded our Grasslands plant from about 55 MMcf/d to 100 MMcf/d. When we started that project we were running about 40 MMcf/d of significantly leaner gas through that plant and we thought we would have room for several years.”

However, when things took off on the gathering and processing side last year ONEOK invested $1 billion for a 300 MMcf/d plant that will quadruple its processing capacity in the basin.”We’re also adding compression, pipelines expansions and upgrades,” he said. “Conservatively we’ll probably put in 600 miles of new pipelines this year. These projects are primarily backed by acreage dedications.”

On the NGL side, Scharf said another $700 million is being dedicated to construct a 500+ mile, 50,000-bpd NGL pipeline from the Williston Basin to the Overland Pass Pipeline, of which ONEOK owns 50 percent. Plans call for an expansion of the Overland Pass Pipeline to 255,000 bpd and increasing capacity of the company’s Bushton fractionator by 50,000 bpd.