BISMARCK, N.D.--(BUSINESS WIRE)--WBI Energy, Inc., the pipeline and energy services subsidiary of MDU Resources Group, Inc. (NYSE: MDU), announced that planning for a 375-mile natural gas pipeline stretching from western North Dakota to northwestern Minnesota is underway and an open season seeking capacity commitments has begun.
“The Dakota Pipeline offers another avenue to move Bakken-produced natural gas out of the area and complements our other ongoing activities to build connections to several natural gas processing facilities,” said David L. Goodin, president and CEO of MDU Resources. “The increase in natural gas pipeline capacity out of the region will provide additional transportation opportunities for new production as it comes on line, as well as more capacity for natural gas captured through industry’s efforts to reduce the flaring of this valuable resource.”
North Dakota Governor Jack Dalrymple has been concerned about the amount of natural gas flaring in the state and has asked an industry task force to provide recommendations. “We are committed to working with WBI Energy and the entire energy industry so that we continue to reduce flaring, add value to our energy resources and help meet the nation’s energy needs,” Dalrymple said. “This pipeline is part of the solution and I commend MDU Resources and WBI Energy for their commitment to North Dakota and to the responsible development of our energy resources.”
Rapidly growing natural gas production in western North Dakota, coupled with increasing demand from industrial, commercial and residential markets in eastern North Dakota, Minnesota, Wisconsin, Michigan and other Midwest markets, has generated strong interest in the Dakota Pipeline from potential shippers across the region.
“This project provides access to markets in the Mid-Continent and Great Lakes regions of the U.S. We have been encouraged by the interest the marketplace has shown in this project to date,” said Steven L. Bietz, president and CEO of WBI Energy. “Through the open season process, we intend to secure capacity commitments for the Dakota Pipeline and begin the process for obtaining the necessary permits and regulatory approvals.” An open season is pipeline industry terminology for a time period when interested shippers make binding bids for firm transportation capacity on the new pipeline.
The proposed route will provide access to interconnections with pipelines operated by Great Lakes Gas Transmission Limited Partnership, Viking Gas Transmission Company and, potentially TransCanada Pipelines Limited. The interconnections would be at a point in northwestern Minnesota.
The Dakota Pipeline has been designed to initially transport approximately 400 million cubic feet per day of natural gas and, depending on user commitments, could be expanded to more than 500 MMcf/d. At a transport volume of 400 MMcf/d, the pipeline carries enough natural gas annually to provide the needs of 1.3 million homes.
The project investment for the proposed 375-mile pipeline system is estimated to be approximately $650 million. The majority of the new pipeline would be comprised of 24-inch diameter pipeline and includes two new compressor stations.
Following receipt of the contractual capacity commitments from the open season and the granting of the necessary permits and regulatory approvals, construction on the new pipeline could begin in 2016 with completion expected in 2017.
MEDIA ADVISORY: View downloadable map showing the proposed pipeline route.
The information in this release includes certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. The forward-looking statements contained in this release, including statements by executive management of MDU Resources and WBI Energy, are expressed in good faith and are believed by the company to have a reasonable basis. Nonetheless, actual results may differ materially from the projected results expressed in the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include obtaining sufficient long-term natural gas supply commitments and receiving the necessary permits and regulatory approval in a timely manner; the capacity of the proposed pipeline; and, the schedule and costs to complete the project. For a discussion of other important factors that could cause actual results to differ materially from those expressed in the forward-looking statements, refer to Item 1A – Risk Factors in MDU Resources’ most recent Form 10-K and Form 10-Q.
About WBI Energy
WBI Energy, Inc. provides natural gas transportation, underground storage, processing and gathering services, as well as oil gathering, through regulated and nonregulated pipeline systems primarily in the Rocky Mountain and northern Great Plains regions of the United States. It also provides cathodic protection and other energy-related management services. WBI Energy, Inc. is an indirect subsidiary of MDU Resources Group, Inc. For more information about WBI Energy, Inc., visit the company’s website at www.wbienergy.com.
About MDU Resources
MDU Resources Group, Inc., a member of the S&P MidCap 400 index, provides value-added natural resource products and related services that are essential to energy and transportation infrastructure, including regulated utilities and pipelines, exploration and production, and construction materials and services. For more information about MDU Resources, see the company's website at www.mdu.com or contact the Investor Relations Department at firstname.lastname@example.org.