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Lynn Helms, director of the NortH Dakota Department of Mineral Resources, said natural gas production hit a record in March even as oil production dropped about 1 percent. Tom Stromme / Bismarck Tribune

ND natural gas production sets record as oil production drops

BISMARCK—North Dakota natural gas production hit another record high in March even as oil production dropped, illustrating the need for more gas infrastructure in the Bakken.

The state produced more than 2.1 billion cubic feet per day of natural gas, with companies flaring about 12 percent of gas produced, the Department of Mineral Resources said Tuesday, May 15.

Oil production dropped about 1 percent in March to 1.16 million barrels per day, preliminary figures show.

With oil activity anticipated to increase this summer, Director of Mineral Resources Lynn Helms said he expects crews will be busy building infrastructure needed to keep up with growing volumes of natural gas.

"We're going to see another surge of workers from out of state laying pipelines, and building compressor facilities and building gas plants," Helms said.

On Tuesday, the North Dakota Public Service Commission granted approval for Oneok to proceed with the Demicks Lake natural gas processing plant, a McKenzie County project that was approved three years ago but put on hold when commodity prices dropped.

Oneok asked regulators to approve some modifications to the plant, which is permitted to process up to 400 million cubic feet per day. The Demicks Lake plant, one of five natural gas processing plants under development in North Dakota, is expected to be complete during the fourth quarter of 2019.

Natural gas production is expected to exceed processing capacity beginning this summer until projects under construction start to come online, said Justin Kringstad, director of the North Dakota Pipeline Authority.

Companies flared a total of 258 million cubic feet per day in March, similar to the level flared in February. Statewide, companies captured 89 percent of Bakken natural gas, ahead of the state's requirement of 85 percent. The requirement increases to 88 percent in November, but the North Dakota Industrial Commission recently adopted changes to its policy that give the industry more flexibility.

In February, 12 companies captured less than 85 percent of natural gas but none were required to restrict oil production because they met one of the conditions in the policy, the Department of Mineral Resources said.

Oil could set record in June

Spring road restrictions continue to be in place for much of the Bakken, which is expected to dampen May oil production, Helms said.

But drilling and hydraulic fracturing activity are expected to increase this summer, with Helms projecting that June oil production could exceed the record 1.2 million barrels per day set in December 2014.

The state has a backlog of 916 wells that have been drilled but are waiting on fracking crews.

North Dakota had 59 drilling rigs operating on Tuesday, a figure that's expected to climb by about 10 this year, Helms said.

The state saw a slight uptick in rail transportation of crude oil in March, with about 17 percent of crude traveling by rail and 73 percent traveling by pipeline, Kringstad said.