Hess completes expansion of Tioga gas plant in North Dakota

Hess Corp. has completed the expansion of its Tioga gas plant in northwestern North Dakota.

The expanded plant, which services natural gas produced from the Bakken tight-oil formation, is now fully operational and processing about 120 MMcfd. Output is soon expected to ramp-up to 250 MMcfd, and could rise to more than 300 MMcfd.

Prior to the expansion, the plant processed only 100 MMcfd.

Gov. Jack Dalrymple numbered among the state officials present at a ceremony May 19 to commemorate the opening of the expanded plant. Dalrymple called the expansion “an example of what we need to see, which is more capturing of natural gas and more added value to the product.”

The expansion of the Tioga plant will reduce the amount of gas flared at Hess’s Bakken operations to 15-20% from about 25% before the plant was shut down for construction work.

Gas production in North Dakota has risen sharply in recent years, in step with increasing oil production from the Bakken shale. However, the state lacks the midstream infrastructure needed to utilize all of the fuel.

Data from the North Dakota Industrial Commission show 33% of the state’s nearly 1 bcfd of gas production was being flared in mid-May. State regulators earlier this year adopted a flaring-reduction plan that seeks to reduce flaring to 5% of gas production by 2020.

Hess is a leading operator in the Bakken, holding more than 640,000 net acres. The company is running a 17-rig drilling program this year, and expects net production for the full year will average from 80,000-90,000 boe/d.

Greg Hill, president and chief operating officer for Hess, said the Bakken will be the single biggest contributor to the company’s production growth during the next 5 years. “We expect that by 2018, we’ll be producing 150,000 boe/d from the Bakken,” Hill said.

Hess plans to invest more than $1.5 billion in North Dakota infrastructure projects from 2012 to 2014.

Contact Rachael Seeley at rachaels@ogjonline.com.

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