US$ 1.8 billion oil pipeline cancelled due to insufficient commitments

The proposed US$ 1.8 billion Bakken Crude Express Pipeline from North Dakota to Oklahoma has been cancelled due a lack of commitments to transport its oil.

One of the leaders in the gathering, processing, storage and transportation of natural gas in the US, Tulsa-based Oneok Partners LP has announced that the Bakken Crude Express Pipeline will not be built. Its construction was expected to begin in 2013.

The company said the outlook for crude oil supply is healthy but it could not get enough producers to promise long-term use of the 1300 mile pipeline.

“Despite the robust outlook for crude oil supply growth in the Williston Basin in the Bakken Shale, we did not receive sufficient long-term commitments under the terms we needed to construct the Bakken Crude Express Pipeline,” said Terry K. Spencer, ONEOK Partners President. 

“While we are disappointed with the results of the open season, we remain committed to serving Williston Basin producers for their natural gas, natural gas liquids and crude oil infrastructure needs. We still believe the Bakken Crude Express has a competitive advantage over other competing projects due to its proximity to the route of our Bakken NGL Pipeline currently under construction and other ONEOK Partners natural gas liquids pipeline corridors,” Spencer added.

The company added it still has other announced natural gas and natural gas liquids projects under way and many of them are in the Bakken Formation in Montana and North Dakota.

“Although we have decided not to proceed with this project, we still have US$ 4.2 billion to US$ 4.8 billion of announced natural gas and natural gas liquids projects under way, many of which are in the Bakken Shale. Additionally, the partnership has a US$ 2 billion-plus backlog of unannounced growth projects,” Spencer concluded.

The proposed oil pipeline would have moved 200 000 barrels of oil out of the Williston Basin in the Bakken Formation.

Edited from various sources by Cecilia Rehn.

Read the article online at: https://www.worldpipelines.com/business-news/28112012/us$_1-8_billion_oil_pipeline_cancelled_due_to_insufficient_commitments/