North Dakota producers flare 24% of all natural gas produced

North Dakota’s Bakken Shale natural gas output rose to a new record, but so did flaring, as pipeline and processing outages caused producers to burn off nearly 700 MMcf/d, the latest state data showed.

As North Dakota oil production reached a record high of about 1.42 million b/d in June, associated gas production followed suit, reaching a new peak of 2.876 Bcf/d, according to the North Dakota Industrial Commission. But a lack of adequate gas gathering infrastructure combined with outages during the month prompted producers to flare 24%, or 686 MMcf/d, of the product. This represented a month-on-month increase of 154 MMcf/d.

“We really fell out of bed in terms of flaring,” said NDIC Director Lynn Helms during a meeting on Thursday afternoon.

The percentage flared was double current state regulations, which require operators to flare no more than 12%. The figure drops to 9% in November 2020. Producers who fail to meet these requirements face possible fines. Flaring was particularly high in the Fort Berthold Indian Reservation, where operators flared an average of 37% of associated gas in June.

But because of outages, most of the producers flaring above the limit in June will likely be granted an exception by the state.
Alliance Pipeline, which transports gas from North Dakota and Canada to Midwest markets, was one of the drivers of the dramatic increase. The pipeline was out of service June 18-23 as service was conducted on the line farther downstream.

The Bantry and Tioga gathering lines tie into Alliance in North Dakota. After providing an average of 245 MMcf/d of gas to Alliance throughout the first part of the month, those points fell to zero during the outage, according to S&P Global Platts Analytics data. Even after coming back online June 24, they only supplied an average of 207 MMcf/d to Alliance over the rest of the month.

Also, Oasis’s Wild Basin gas processing plant was shut from mid-June through part of July, and Kinder Morgan’s Watford City processing plant was shut for more than a week during June for repairs.

While Helms expects high flaring numbers again in July, he believes it should start to improve in August and throughout the rest of the year as new gathering and processing capacity comes online.

Over the next two years, midstream companies working with producers are expected to add more than 1.5 Bcf/d of processing capacity in the Bakken, according to Platts Analytics data. Oneok, Crestwood Energy Partners, Kinder Morgan, and a collaboration between Targa and Hess are bringing on the bulk of processing capacity.

North Dakota Lieutenant Governor Brent Sanford said last month that the only thing keeping the state from producing 2 million b/d of oil or more is limited gas capture and processing.

“The only thing keeping us from setting a new oil production record is our gas production,” Sanford said. “It is outpacing our oil production and makes it difficult to meet our gas-capture goals. The gas-to-oil ratio continues to rise as producers better understand the shale.”

Sanford also said the state needs to boost its percentage of gas-fired power generation, which could help alleviate the gas-capture issue.
Source: Platts