ND Company cancels plans for a trans-state gas pipeline

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BISMARCK, ND (AP) — Despite millions of dollars in promised grants, a unit of North Dakota’s only Fortune 500 company said it would not proceed with plans to build a gas pipeline between the oil patch of the western North Dakota and the eastern part of the state. .

WBI Energy, a subsidiary of Bismarck-based MDU Resources Group, said the project was not viable due to regulatory uncertainty, limited demand in the state and rising construction costs, labor and land acquisition.

In a letter to North Dakota Pipeline Authority Director Justin Kringstad, the company said material and construction costs have risen 50% in the past nine months alone.

“Recent and potential future inflationary pressure presents a significant challenge for a large-scale pipeline project from west to east in North Dakota,” the company said. “This challenge is further compounded by the fact that the actual construction of a major pipeline project, if it were to go ahead, would take place in four to five years, following a process of location/regulation uncertain.”

In November, the North Dakota Legislature earmarked $150 million in federal coronavirus aid to help build such a transstate pipeline for natural gas, which is a byproduct of oil production. The idea, backed by Republican Gov. Doug Burgum, was to help reduce wasted flaring at well sites and direct it to communities in the gas-poor eastern part of the state in the hope of stimulating industrial development.

Money requests ended on Monday.

Only Viking Gas Transmission, a Tulsa, Oklahoma-based subsidiary of ONEOK, applied for the grants, Kringstad said. The company wants $10 million to build a 12-mile pipeline that would connect to its existing pipeline in western Minnesota to supply gas to the Grand Forks area.

Viking said the total cost of its project is $26 million.

WBI Energy did not disclose its estimate for the construction of a trans-state gas pipeline.

Kringstad said unused grant money “will likely go back to the Legislative Assembly to be reappropriated.”

Burgum spokesman Mike Nowatzki said the state “will continue to work on solutions to move natural gas from western to eastern North Dakota.”

WBI Energy owns and operates more than 3,700 miles of transmission and storage pipelines in the Dakotas, Minnesota, Montana and Wyoming. The company said 1,545 miles of its pipelines are in North Dakota.

WBI Energy said the costs of securing the pipeline right-of-way are estimated to be 25% higher than its previous pipeline projects “and frequently exceed recent market values ​​for buying and selling land in North Dakota. rural”.

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