Veresen and Enbridge Continue to Grow Bakken Midstream Services

abarrelfullabarrelfull wrote on 28 Sep 2011 13:12
Tags: enbridge pipeline usa veresen

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Veresen Inc. (TSX:VSN) and Enbridge Inc. (TSX:ENB) (NYSE:ENB), joint owners of Alliance Pipeline, today announced approval by their respective boards of directors which will allow Alliance to proceed with development of a natural gas pipeline lateral and associated facilities to connect production from the Hess Tioga field processing plant in the Bakken region of North Dakota to the Alliance mainline near Sherwood, ND. Alliance has executed a precedent agreement with Hess Corporation as an anchor shipper on the Tioga Lateral pipeline, including matching capacity on the Alliance mainline. Aux Sable (owned by Veresen, Enbridge and Williams Partners, L.P.) and Hess have reached a concurrent agreement for the provision of NGL services. The pipeline is expected to be in service by the third quarter of 2013, subject to regulatory and other required approvals.

The 77-mile (124-kilometer) Tioga Lateral will facilitate movement of the high-energy, liquids-rich natural gas to natural gas liquid (NGL) processing facilities owned by Aux Sable Liquids Products at the terminus of the Alliance mainline system. Through the agreement with Hess, Alliance has secured sufficient commitment to proceed with the Tioga Lateral and will hold an Open Season to solicit additional shipper interest. The pipeline will have an initial design capacity of approximately 120 million cubic feet per day, which can be expanded based on shipper demand.

Stephen White, President and CEO of Veresen commented, "With the rapid increase in crude oil drilling activity in the Bakken, there is a corresponding need for additional capacity to gather and process associated liquids-rich natural gas volumes. This creates tremendous opportunity for Veresen to leverage our core assets to create timely, flexible, market-driven solutions to enable producers to generate value from the NGL stream."

"Enbridge continues to focus on the Bakken as a strategic priority," said Al Monaco, President, Gas Pipelines, Green Energy and International, Enbridge Inc. "Our significant investments in crude oil transportation systems in North Dakota and Saskatchewan enable Bakken producers to access multiple markets. We're now extending those services to natural gas and NGL midstream infrastructure. The Tioga Lateral and the recently acquired Prairie Rose Pipeline and Palermo Condensate Recovery Plant (previously known as the Stanley Gas Plant) allow us to attract additional gas volumes to our Alliance Pipeline and draw additional liquids rich gas to our Aux Sable NGL extraction and fractionation facilities."

The Bakken region of southern Saskatchewan and northern North Dakota is one of the most prolific resource plays in North America. While expansion in the Bakken has been primarily driven by oil shale, there is also significant value in the natural gas and NGL reserves associated with the oil.

Together, Alliance and Aux Sable offer Bakken natural gas producers access to high value downstream gas and Midwest NGL markets. Alliance carries high BTU gas to Aux Sable's processing and NGL extraction plant in Channahon, Illinois. Utilization of these existing midstream assets to serve the Bakken provides producers with readily available solutions to transport gas to market and realize value from the NGLs extracted. Leveraging existing infrastructure minimizes the environmental and stakeholder impact of new construction, allowing for flexible, timely and cost-efficient expansion as Bakken volumes increase.

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