North Dakota LNG Announces Construction of North Dakota’s First Liquefied Natural Gas Processing Facility


In a press release on Wednesday, North Dakota Governor Jack Dalrymple and officials with North Dakota LNG (NDLNG) announced the construction of a liquefied natural gas (LNG) processing facility to be located in Tioga, North Dakota. This will be North Dakota’s first LNG processing facility. Operations at the facility will start this summer. The facility will have the capacity to produce 10,000 gallons of LNG per day. The facility’s second phase will start in early 2015 and increase total production levels to more than 76,000 gallons per day.

Fuel from NDLNG will be used to offset the use of diesel during oil drilling operations in the Bakken shale. The Bakken shale straddles the U.S.-Canada border and runs through North Dakota and Montana. In April of last year, the U.S. Geological Survey estimated  that the Bakken shale has 3.65 billion barrels of recoverable crude oil, making it the largest oil field in the U.S. outside of Alaska. Operators producing oil and gas from reservoirs in the Bakken face high fuel costs and scrutiny from environmental advocates because of their use of diesel-powered equipment and the flaring of natural gas during drilling activities. The NDLNG project is expected to help address these matters. Pat Hughes, the CEO of NDLNG, said the LNG being processed at the plant will be the equivalent of 44,000 gallons of diesel fuel per day. He also said the amount of diesel fuel used in drilling operations can vary but can reach up to 2,500 gallons per day at a drilling site.

NDLNG also will offer North Dakota’s agricultural industry an alternative fuel choice to propane. Leveraging LNG is expected to lower operating costs for farmers and reduce emissions, and result in the use a 100 percent locally produced fuel. “Speaking on behalf of the operator community in North Dakota, this is the type of innovative, entrepreneurial thinking we need to help meet our flaring capture goals in the Bakken… it’s a great idea,” said Ron Ness, President, North Dakota Petroleum Council.

Governor Dalrymple expressed his support for the NDLNG project, saying “This is an exciting day for North Dakota. NDLNG’s state-of-the-art processing facility will play an important role in efforts to convert natural gas feedstock into value-added liquid fuels, foster more cost-effective unconventional shale development operations and support our nation’s desire to reduce its dependence on foreign fuel sources. We appreciate NDLNG’s investment in our state’s energy industry and support them in their venture to move North Dakota’s rich natural gas resources to market.”

More information can be found here, here, and here.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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