BISMARCK, N.D. (AP)
A $130 million plan to expand the Enbridge oil pipeline system in North Dakota is the biggest news for oil producers in the state in more than 20 years, a state official says. Houston-based Enbridge Energy Partners, L.P., announced the plans Friday, saying it will expand its pipeline system by 45,000 barrels per day by late 2009. "It's the biggest thing since the current Enbridge system was built in about 1984," said Lynn Helms, the director of the state's Department of Mineral Resources. The Enbridge system brings crude oil from western North Dakota and eastern Montana to Minnesota to connect with other pipeline systems and then to refinery markets, officials say. "Part of it is going to be putting in new pipe to parallel existing pipe, and part of it is going to be adding horsepower to pump stations," Helms said of the expansion. Producers can get commitments for about 80 percent of the pipeline, Helms said. "Most of our producers that are committing millions of dollars to drill Bakken wells this is what they really want," he said. The Bakken is a geologic formation in northwestern North Dakota that is made up of hard shale and is costly to drill. "If you're going to drill Bakken wells for as much as $5 million apiece, you really want that (pipeline) assurance," Helms said. "We have people who are planning to drill 300 wells." The Enbridge system currently has a pipeline capacity of 95,000 barrels a day after an earlier expansion, Helms said. This summer, the company plans to install more pipe to increase that capacity to 110,000 barrels a day, he said. The latest plans will take that to 155,000 barrels a day. "It's almost double where we were a year ago," Helms said. Enbridge is not asking for help with financing the expansion, but the company is asking the state's new pipeline authority for help with permits and in working with federal regulators, Helms said. The authority was created by the last Legislature. Officials say they have been working in North Dakota and in Washington to encourage more North Dakota investment by energy companies, and they issued statements Friday to praise the Enbridge plans. The Enbridge project is the kind that can be developed faster through the new state pipeline authority, Gov. John Hoeven said. Sen. Byron Dorgan, D-N.D., said it would be a boost to the state's energy development. "Our state has significant reserves of oil and natural gas, but too often bottlenecks in the pipeline system prevent our producers from getting it to the market," he said.