Currently more crude oil from North Dakota is transported by rail than by pipeline. But if recent estimates by the North Dakota Pipeline Authority (NDPA) hold true, that situation will change by 2016.
The NPDA projects that total pipeline system capacity will increase 172% in the next three years. By 2016, NDPA estimates there will be approximately 1.6 million barrels per day of pipeline capacity available, compared to estimates of 1.4 million barrels per day of rail capacity, a pipeline to rail capacity differential of 200,000 barrels per day.
Some significant capacity additions are driving the increase in pipeline capacity. One such project is Stinson Leonard Street client Energy Transfer Partners’ (ETP) approximately 1,100-mile crude oil pipeline from the Bakken and Three Forks production area in North Dakota to Patoka, Illinois. The pipeline will initially carry 320,000 barrels per day of crude oil, with the ability to expand as per customer demand. The pipeline expects to start operating in the latter half of 2016 after securing, during a recent open season, multiple long-term binding contractual commitments from shippers sufficient to fully support the pipeline.
Other anticipated pipeline projects include Enbridge’s Sandpiper project, a 600-mile, 230,000 bpd pipeline that would run from Alexander in McKenzie County North Dakota to Clearbrook, Minnesota. Enterprise Products Partners is also in the planning stages of a 1200-mile, 340,000 bpd pipeline that would run from Stanley in Mountrail County, North Dakota to Cushing, Oklahoma. In addition, True’s Belle Fourche joint venture with Tallgrass Pony Express is expected to go into service in September and ass another 100,000 bpd takeaway capacity. These are just some of the pipeline companies with anticipated projects.