Posted 2/29/12 (Wed)
By Kate Ruggles
Farmer Staff Writer
It’s ‘open season’ right now for a Colorado company seeking shipping commitments from oil producers.
According to its web site, Durango-based Saddle Butte LLC is currently proposing to build a 450-mile pipeline from Alexander, N.D., to Clearbrook, Minn.
If completed, it will move 150,000 barrels of crude daily from western North Dakota to a hub in Minnesota, that will then connect the product to several markets throughout the country.
But the time to move is now. Interested businesses have only the ‘open season’ window, which began Feb. 14 and ends March 16, to commit to using the proposed pipeline system, the High Prairie Pipeline.
According to Greg Ward, vice president of Saddle Butte LLC, the ‘open season’ is an industry standard process.
“Because this is a common carrier pipeline, we are required to give businesses an opportunity to commit to shipping their product with this pipeline,” Ward states.
Justin Kringstad, director of the North Dakota Pipeline Authority, says that for the project to move forward, Saddle Butte LLC is hoping to have a certain percentage of commitments by the end of the open season window.
“Since the pipeline will move 150,000 barrels daily, we need commitments for 90 percent of that amount, or 135,000 barrels,” states Ward.
If sufficient commitments are obtained, the company will then seek federal and state regulatory approval, and if all goes well, the pipeline could be running by late 2013.
“This project is being put together to meet the needs of growing North Dakota production levels,” Kringstad states. “North Dakota pumped a record 534,000 barrels of oil daily in December 2011, and we’re expecting North Dakota production to increase over the next 10 to 15 years.”
Kringstad states that the proposed pipeline will add capacity and expand the market of regional oil drillers, which is why he is a huge proponent of companies using pipelines to ship their product, and therefore, having more pipelines in place to meet future growth demands.
When crude isn’t transported via pipeline, businesses are forced to use trains and semis to move their product, which is less efficient and requires energy consumption, causes highway congestion and puts a strain on infrastructure and the environment.
“Pipelines are a safer, more efficient, more reliable and more economically friendly means of transportation,” states Ward.
According to Ward, 90 percent of the pipeline’s route would follow existing utility and roadway corridors, further minimizing the pipeline’s footprint.
Saddle Butte Pipeline LLC is in the very preliminary stages of the High Prairie Pipeline project, therefore, they do not have a projected cost for the project. They do, however, expect the project to employ around 2,500 people once construction begins.