Report Volume XXIX, Number 3 October 1, 2017

September 28, 2017

INDUSTRY NEWS (Bismarck, ND) – MDU Resources Group, Inc. announced recently that subsidiary WBI Energy, Inc. plans to expand its Line Section 27 natural gas transportation system in the Bakken producing area in northwestern North Dakota.

The $27 million to $30 million expansion project will involve construction of approximately 13 miles of 24-inch diameter pipeline and associated facilities. When the expansion is complete, the transportation capacity on WBI Energy’s Line Section 27 will be over 600,000 dekatherms per day. The targeted in-service date for the project is fall 2018, which is the same timeframe for completion as WBI Energy’s $55 million to $60 million Valley Expansion project near Fargo, North Dakota.

“The Line Section 27 Expansion is a good project, right in our backyard, that underscores the continued demand for reliable natural gas transportation service in the Bakken,” said David L. Goodin, president and CEO of MDU Resources. “This spring, we added significant new compression to our system in the Bakken and surpassed 1 billion cubic feet per day of subscribed firm capacity, system wide, for the first time. With these new projects in the Bakken, our natural gas transportation volumes continue to grow, and will be further enhanced by our Valley Expansion project in eastern North Dakota and western Minnesota. We remain optimistic about the growth opportunities at WBI Energy.


INDUSTRY NEWS (Midland, TX) – Oryx Midstream Services II, LLC (Oryx II) announced today that it will build a new regional crude oil transportation pipeline serving the Delaware Basin with initial capacity of up to 400,000 barrels per day. Oryx II recently closed on a long-term regional oil transportation agreement with WPX Energy and other producers bringing total acres committed to Oryx II to approximately 300,000 dedicated acres. When combined with Oryx Midstream Services, LLC (Oryx I), the total Oryx Delaware basin dedication footprint and system capacity will be in excess of 850,000 acres and 600,000 barrels per day, respectively.

Construction will begin immediately on the new 220-mile regional transport line that will provide receipt points from the Carlsbad, Stateline, Pecos and Pyote areas, and deliver crude to Crane and Midland, Texas. The system, comprised of 16-, 20- and 24-inch lines, will have an initial capacity of up to 400,000 barrels per day with the ability to expand based on shipper needs. It will serve production from every active county in the Delaware Basin including Lea and Eddy counties in New Mexico and Loving, Reeves, Ward, Pecos, Winkler and Culberson counties in Texas. The new crude oil pipeline will be constructed in phases and is expected to be in full service by the end of 2018.

“As ongoing improvements are made in drilling technologies and rig counts in the Delaware Basin increase, production growth from Oryx’s customer base, including WPX, continues to be strong. With this strong production growth comes transportation bottlenecks, an issue that this new pipeline will address, providing much-needed takeaway capacity in the area,” said Oryx Chief Executive Officer Brett Wiggs. “The Oryx team remains focused on improving and expanding our asset base, to not only meet producers’ current needs but also anticipate the future needs of our customers.”

Karl Pfluger, Oryx President, said “The combined footprint of our crude gathering and transportation system is unparalleled. Based on our current and future customers’ needs, we are considering strategic opportunities to leverage the unique scale of our combined footprint to better serve producers in the Delaware basin. One of these strategic opportunities includes a potential long-haul transport system to the Gulf Coast.”

Oryx I was launched in 2014 by an initial equity commitment totaling up to $300 million from Quantum Energy Partners, Post Oak Energy Capital, Wells Fargo Energy Capital, Oryx management and other private investors. In March 2017, Oryx II closed on an equity commitment of $340 million from the same sponsor group, bringing the total commitment to Oryx to $640 million.


INDUSTRY NEWS (Calgary, AL, Canada) – Veresen Inc. is pleased to announce Jordan Cove Energy Project (“Jordan Cove”) and Pacific Connector Gas Pipeline (“Pacific Connector”) have filed applications with the United States Federal Energy Regulatory Commission (“FERC”) for the construction and operation of a 7.8 million tonne per annum liquefied natural gas (“LNG”) export terminal in Coos Bay, Oregon and the related Pacific Connector that will transport natural gas from the Malin Hub in southern Oregon to the LNG export terminal.

“Completing the pre-filing phase and submitting the formal applications to FERC is a major milestone for the projects,” said Don Althoff, President and CEO of Veresen. “Our significant efforts to optimize the design to minimize its environmental footprint and accommodate landowner requests, as well as the support of our world-class LNG buyers, should result in the receipt of the positive regulatory decisions required to build Jordan Cove. We look forward to continuing our work with the local community, Tribal leaders and FERC, as well as other federal and state agencies to advance Jordan Cove.”

Jordan Cove and Pacific Connector have conducted open houses to present the project to the public. In addition, FERC held a series of public scoping meetings in June to collect further public input. The application includes the elimination of a 420 MW power plant, reflects more than 50 route adjustments of Pacific Connector and the optimization of multiple water crossings to minimize environmental impacts via trenchless drilling techniques.

The total engineering, procurement and construction cost of both the LNG export terminal and Pacific Connector is approximately US$10 billion, with approximately 90% of U.S. content. Additionally, the project will generate approximately US$60 million in annual property taxes, including US$20 million from Pacific Connector in the counties through which the pipeline traverses. The project will require approximately 6,000 workers during construction and more than 200 new permanent jobs upon commissioning.

Jordan Cove and Pacific Connector are requesting that FERC issue a Draft Environmental Impact Statement in 2018, leading to FERC decisions by the end of 2018. This will position the project for a potential final investment decision in 2019 and an in-service date in 2024.

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