N.D. readies pipeline funding

(Brian Ford is editor-in-chief for Industrail Info Resources, which provides up-to-dfate project information on a wide range of industries across the globe.)

State officials in North Dakota are keen to see more natural gas move east from the oil and gas-bearing Bakken Formation in the northwestern part of the state. To make this happen, the state is willing to put up to US$500 million on the table to help finance construction of a new pipeline.

In late April, the North Dakota Industrial Commission gave a final green light to awarding WBI Energy Transmission a financial guarantee to build a pipeline that will bring natural gas to the eastern part of the state. Gas from the pipeline could be instrumental in the development of power generation to support new data centers and manufacturing plants in the central and eastern parts of the state.

Brian Ford

Dubbed the Bakken East pipeline, it would move approximately one billion cubic feet per day of natural gas from Watford City to Fargo. In a filing with the Federal Energy Regulatory Commission (FERC), WBI Energy, a subsidiary of Bismarck, North Dakota-based MDU Resources Group, said the initial design comprised approximately 350 miles of mainline pipeline and 90 miles of lateral pipelines.

The pipeline would “serve new power generation, industrial facilities, and local distribution company demand in central and eastern North Dakota,” the company said in the FERC filing. The project will interconnect with WBI Energy’s existing natural gas pipeline system and other interstate pipelines serving the U.S. Midwest. Those interstate connections make the pipeline subject to FERC approval.

The pipeline would be placed into service in two phases, with the first phase having a targeted in-service date of November 2029 and the second phase targeted for November 2020.

“Potential compression includes the construction of two greenfield compressor stations and additional compression at three existing compressor stations,” WBI Energy told FERC.

State Support

Rather than paying directly to build the project, the state would purchase a share of the pipeline’s transport capacity. In August, the state’s Industrial Commission directed the North Dakota Pipeline Authority to start talks with WBI Energy for the potential purchase of transport capacity.

At that time, Pipeline Authority Executive Director Justin Kringstad said, “As natural gas production grows, we need reliable, scalable infrastructure that expands takeaway capacity and connects our resources to new market opportunities.”

According to the North Dakota Monitor, the state has had a program to encourage businesses to build natural gas pipelines connecting to eastern North Dakota for over 15 years. The state Legislature in 2023 made US$30 million per year in financing available, and the 2025 Legislature increased that amount US$50 million per year.

The state would foot the bill for only part of the project. Unofficial estimates put the total price tag at US$1.2 billion to US$1.6 billion. In return, the pipeline is projected to support US$170 million per year in oil and gas tax revenues for the state government. That does not include the economic benefits from any new industries that spring up along the pipeline route to take advantage of the natural gas supply.

The state’s support is intended to serve as a financial backstop for the project, with plans for the state to eventually transfer its share of the pipeline capacity to private businesses. The Pipeline Authority’s Justin Kringstad was quoted as saying if the state is unable to transfer its pipeline capacity, the authority could work with a gas marketing firm to try to recoup the investment.

Also, since natural gas is a byproduct of oil production, without additional natural gas pipelines from the Bakken Formation, energy companies could be forced to reduce oil production. Aging wells produce a higher percentage of natural gas, which contributes to tighter pipeline capacity, according to the North Dakota Monitor. Various regulations prevent producers from just burning or releasing all that gas, so they have to either use it or sell it.