Industrial Commission Update Justin J Kringstad Geological Engineer - PowerPoint PPT Presentation

Industrial Commission Update Justin J Kringstad Geological Engineer Director North Dakota Pipeline Authority February 12, 2019

US Williston Basin Oil Production, BOPD 2 2 2 2 JJ Kringstad - North Dakota Pipeline Authority

Estimated Williston Basin Oil Transportation 3 3 3 3 JJ Kringstad - North Dakota Pipeline Authority

Estimated ND Rail Export Volumes 4 4 4 JJ Kringstad - North Dakota Pipeline Authority

Rail Destinations Market Share (Oct 2018) Data for Rail Destination Market Share Provided by the US Energy Information Administration 5 5 5 JJ Kringstad - North Dakota Pipeline Authority

Crude Oil Prices – February 11, 2019 Brent $61.21 WTI + $9.69 Cushing $51.52 Pricing Data: Bloomberg & Houston WTI CME (LLS-Argus) WTI + $5.69 6 6 JJ Kringstad - North Dakota Pipeline Authority JJ Kringstad - North Dakota Pipeline Authority

Midwest (PADD 2) Refinery Crude Oil Consumption EIA Data 8 8 8 JJ Kringstad - North Dakota Pipeline Authority

North Dakota Oil Pricing 9 9 9 JJ Kringstad - North Dakota Pipeline Authority

Statewide Oil Performance ~12% Improvement Over 2017 10 Average BKN/TF Well Performance Statewide 10 JJ Kringstad - North Dakota Pipeline Authority

Statewide Initial Oil Production Rates – 24hr 11 11 JJ Kringstad - North Dakota Pipeline Authority

North Dakota Oil Production Forecast Assumes Current Technology – Enhanced Oil Recovery Not Included 12 12 12 JJ Kringstad - North Dakota Pipeline Authority

North Dakota Oil Production Forecast Assumes Current Technology – Enhanced Oil Recovery Not Included 13 13 13 JJ Kringstad - North Dakota Pipeline Authority

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Williston Basin Oil Production & Export Capacity, BOPD Assumes Current Technology – Enhanced Oil Recovery Not Included Production forecast is for visual demonstration purposes only and should not be considered accurate for any near or long term planning. 15 15 15 JJ Kringstad - North Dakota Pipeline Authority JJ Kringstad - North Dakota Pipeline Authority

NDPA North Dakota Gas Production Forecast Assumes Current Technology – Enhanced Oil Recovery Not Included 16 16 16 JJ Kringstad - North Dakota Pipeline Authority

NDPA North Dakota Production Forecast Summary Assumes Current Technology – Enhanced Oil Recovery Not Included 17 17 17 JJ Kringstad - North Dakota Pipeline Authority

Solving the Flaring Challenge GREEN – % of gas captured and sold Blue – % flared from zero sales wells Orange – % flared from wells with at least one mcf sold. Simple Terms Blue – Lack of pipelines Orange – Challenges on existing infrastructure Statewide Nov. 2018 Data – Non-Confidential Wells 18 JJ Kringstad - North Dakota Pipeline Authority

Statewide Gas Performance ~12% Improvement Over 2017 19 Average BKN/TF Well Performance Statewide 19 JJ Kringstad - North Dakota Pipeline Authority

Statewide Initial Gas Production Rate: 24hr 20 20 JJ Kringstad - North Dakota Pipeline Authority

Bakken and Three Forks Gas Performance 21 JJ Kringstad - North Dakota Pipeline Authority

Statewide Gas Oil Ratio (MCF/BBL) 22 Average BKN/TF Well Performance Statewide 22 JJ Kringstad - North Dakota Pipeline Authority

Solving the Flaring Challenge Assumes Current Technology – Enhanced Oil Recovery Not Included 23 23 JJ Kringstad - North Dakota Pipeline Authority JJ Kringstad - North Dakota Pipeline Authority

Solving the Flaring Challenge Assumes Current Technology – Enhanced Oil Recovery Not Included 24 24 JJ Kringstad - North Dakota Pipeline Authority JJ Kringstad - North Dakota Pipeline Authority

Major Gas Pipeline and Processing Infrastructure Upcoming or Andeavor Recent Plant Expansion WBI Transmission 25 25 JJ Kringstad - North Dakota Pipeline Authority JJ Kringstad - North Dakota Pipeline Authority

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WBI Energy – Valley Expansion Project Update Project Highlights • 38 Miles - 16” Pipeline • $60 Million • 40,000 MCFD Capacity • In-Service Nov. 2018 27 JJ Kringstad - North Dakota Pipeline Authority

WBI Energy – North Bakken Expansion Project Project Highlights • 67 Miles - 20” Pipeline • $220 Million • 200,000 MCFD Capacity • Expandable to 375,000 MCFD • End of 2021 Proposed Completion • Residue Gas Service From North of Lake Sakakawea to Northern Border Pipeline in McKenzie County 28 JJ Kringstad - North Dakota Pipeline Authority

WBI Energy – Natural Gas Storage Working Gas Balance Summer Injection Winter Withdrawals Storage Data: WBI Energy 29 JJ Kringstad - North Dakota Pipeline Authority

Northern Border Pipeline • 42” Pipeline • Carries Canadian (Port of Morgan) and Domestic Gas • Receives Gas From ND Plants, WBI Transmission Interconnections, and WY Pipelines (Bison & Grasslands) • Midcontinent Deliveries 30 JJ Kringstad - North Dakota Pipeline Authority *Data Source: Northern Border IPS

Simplified Example NB Calculations Conclusion: IF no other gas export options open and all other deliveries on other pipelines stay static, ND gas production could increase 1.15-1.45 BCFD (from Nov-18) before Northern Border is 100% Bakken production. BTU management becomes increasingly important for Bakken residue gas. 31 JJ Kringstad - North Dakota Pipeline Authority

Bakken Natural Gas Infrastructure 32 32 32 JJ Kringstad - North Dakota Pipeline Authority

Regional NGL Infrastructure Kinder 33 JJ Kringstad - North Dakota Pipeline Authority

North Dakota Captured* NGL’s 34 *Non- flared NGL’s & Assumes 10 GPM 34 34 JJ Kringstad - North Dakota Pipeline Authority

NGL Pipeline Takeaway Options 35 35 35 35 JJ Kringstad - North Dakota Pipeline Authority

ONEOK Elk Creek NGL Pipeline Project Highlights • 900 Miles - 20” Pipeline • $1.4 Billion • 240,000 BPD Capacity • Expandable to 400,000 BPD • End of 2019 Proposed Completion • Y-Grade Transportation 36 JJ Kringstad - North Dakota Pipeline Authority

Traditional and Straddle Gas Processing Plants (Clarification Prompted by HB 1205) Raw Gas Gathering Traditional Gas NGL’s Pipe/Truck/Rail Processing Plant Typical ND “Dry” Gas Captures NGL’s “rejected” into “Dry” Gas Methane > 80% the interstate gas network Ethane < 20% NGL’s Small % Propane, Butane+ Straddle Plant Interstate Gas Transmission Pipeline (High Volume – Multiple Plant Sources) 37 JJ Kringstad - North Dakota Pipeline Authority

Natural Gas Processing – “Ethane Capture” Consumer Quality Methane Dry Natural Gas 57.67% “Residue Gas” Ethane 19.94% Raw Natural Gas NGL’S (8 -12 gallons Processing Plant per 1,000 cubic feet (1400+ BTU) Propane of raw gas) 11.33% Y-Grade or Fractionated “Y - Grade” if NGL’S Butane are left together in 3.80% one mix for separation later Natural Gasoline 1.29% 38 38 JJ Kringstad - North Dakota Pipeline Authority

Natural Gas Processing – “Ethane Rejection” Methane 57.67% Consumer Quality Dry Natural Gas “Residue Gas” Ethane 19.94% Propane Raw Natural Gas NGL’S (8 -12 gallons Processing Plant 11.33% (1400+ BTU) per 1,000 cubic feet of raw gas) Y-Grade or Butane Fractionated 3.80% “Y - Grade” if NGL’S are left together in one mix for Natural Gasoline separation later 1.29% 39 JJ Kringstad - North Dakota Pipeline Authority

Contact Information Justin J. Kringstad, Director North Dakota Pipeline Authority 600 E. Boulevard Ave. Dept. 405 Bismarck, ND 58505-0840 Phone: (701)220-6227 Fax: (701)328-2820 E-mail: jjkringstad@ndpipelines.com Websites: www.pipeline.nd.gov www.northdakotapipelines.com 40 JJ Kringstad - North Dakota Pipeline Authority