BISMARCK, N.D. (AP) — A Texas company has obtained enough shipping commitments from oil companies to build a 1,100-mile pipeline from western North Dakota to Illinois.
Dallas-based Energy Transfer Partners LP said Thursday in a statement that the "Bakken Pipeline" would move 320,000 barrels of North Dakota crude daily to an existing pipeline in Patoka, Illinois, where shippers can access Midwest and Gulf Coast markets. The company said it also plans a rail terminal facility at an undisclosed location in Illinois to access East Coast refineries.
Energy Transfer Partners still needs to obtain state and federal permits for the pipeline but its statement said it has begun ordering steel and negotiating construction contracts. The company said it hopes to place the pipeline in service in 2016. Its cost was not disclosed.
The company did not return telephone calls to The Associated Press on Thursday.
North Dakota Pipeline Authority Director Justin Kringstad said the project, if approved, would be the largest-capacity pipeline for the state's crude to date.
"It's very encouraging to see these long-term investments," Kringstad said.
The company's announcement comes after Gov. Jack Dalrymple urged industry and government officials at a conference this week to build more pipelines to keep pace with North Dakota's booming oil production, saying that will reduce truck traffic, curb natural gas flaring and create more markets for the state's oil and gas.
North Dakota is the nation's No. 2 oil producer behind Texas. The state is producing about 1 million barrels a day, though about 70 percent of it is being moved by rail as producers increasingly turn to trains to reach U.S. refineries where premium prices are fetched.
At the conference in Bismarck, Houston-based Enterprise Products Partners LP announced a proposed 1,200-mile pipeline from Stanley, in northwest North Dakota, to Cushing, Oklahoma, the major crude hub where most U.S. shipments are sent.
Brent Secrest, an Enterprise Products vice president, told The Associated Press the pipeline also would carry crude from Montana, Colorado and Wyoming but that the bulk of the 700,000-barrel capacity would be reserved for North Dakota crude.
Secrest said the proposed project has garnered much interest from producers, though the company has not formally sought commitments yet.
Separately, North Dakota regulators on Wednesday approved the construction of the state's portion of the $2.6 billion Sandpiper pipeline that would move 225,000 barrels a day of North Dakota oil to Minnesota and Wisconsin. Regulators said the capacity of the pipeline, proposed by Canada-based Enbridge Energy, is equal to about four oil trains daily.