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Editorial comment

The construction of Energy Transfer Partners’ Dakota Access crude pipeline (DAPL) will result in reduced crude-by-rail shipments from North Dakota (ND). In turn, this will cause rail shippers and investors to adjust to an altered Bakken shale transportation landscape, according to market sources.

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The 470 000 bpd Bakken-to-Patoka pipeline is expected to start up by the end of the year. Moreover, it could edge out many of the crude barrels that are currently moved via rail from North Dakota.

In a second quarter earnings call, Crestwood Midstream Partners, a North Dakota crude-by-rail terminal owner, announced preparation plans ahead of the startup of the DAPL.The company plans on providing storage and blending options for shippers, as well as connecting its 160 000 bpd COLT rail terminal in Epping (ND) to Dakota Access’ nearby terminal. A Crestwood official declined to comment on when the connector pipeline is expected to be completed. However, a source that is close to the situation has said its completion is anticipated for November or December of this year.

Despite lower rail loadings in North Dakota, volumes at Crestwood’s COLT terminal have persevered and remained high, averaging 92 000 bpd in January and 106 000 bpd in August. However, Genscape’s data suggests that these figures are lower than the 134 000 bpd peak in June 2015.

30 miles southwest of the COLT terminal, Savage Services is moving forward with a pipeline to tie in its 175 000 bpd crude-by-rail terminal in Trenton (ND) to DAPL, a Savage spokesman claimed on 19 August. A proposed 9 mile, 60 000 bpd connector pipeline will connect to the nearby Dakota Access terminal in Trenton. No additional information was released following a binding open season for the connector pipeline, which commenced on 11 May and ended on 8 June. A spokesman for Savage declined comment on the outcome of the open season.

Rail volumes loading at the Trenton facility have also remained relatively high despite the downturn in rail volumes. The terminal averaged 75 000 bpd in January and 70 000 bpd in August. However, these figures are down from its peak of 98 000 bpd in August 2015, according to Genscape.

Additionally, the 140 000 bpd Tioga terminal pipeline, from the Bakken crude producer, Hess (ND), to Dakota Access’ Ramberg terminal in Williams County (ND), is under construction, a Hess spokesman highlighted on 25 August. The spokesman declined to comment on the specifics of the connector line. However, they said that Hess has a subscribed capacity of 50 000 bpd on the DAPL. The company is not providing a completion date for the connector pipeline, but it expects the pipe “to be completed when DAPL comes online,” the spokesman said.

With multiple rail terminals and gathering systems, as well as being on Enbridge’s North Dakota pipeline system, the Ramberg/Beaver Lodge area is a vital pricing point for Bakken close to the wellhead.

Loaded rail volumes at Hess’ facility in Tioga averaged 46 000 bpd in August, up from 25 000 bpd in January, but down from its high point of 61 000 bpd in April 2015, Genscape’s data shows.

Meanwhile, integrated Bakken shale player, Tesoro, has plans to connect its 240 000 bpd High Plains pipeline system and its 100 000 bpd BakkenLink Great Plains pipeline with the DAPL system. High Plains is expected to link to the Ramberg terminal, while Bakken Link will connect at Johnson’s Corner, a company spokesman said. Both of the projects are in the construction phase and are to be completed by the end of the year.

However, there are currently no public plans for Tesoro to connect its Fryburg (ND) terminal to the pipeline, according to Justin Kringstad, Director of the North Dakota Pipeline Authority. The terminal is southwest of many other Bakken terminals and in farther proximity to DAPL. Moreover, the company expects rail loadings at the terminal to remain healthy to the US west coast, a source said.

Sacagawea Pipeline Company – a joint venture consisting of Phillips 66, Paradigm Energy Partners and Grey Wolf Midstream – is also planning to forge a pathway to DAPL, according to documents on the North Dakota Public Service Commission’s website. The company is constructing a 70 mile bi-directional connector pipeline from Paradigm’s Keene crude oil terminal in McKenzie County (ND), to Phillips 66’s Palermo rail facility in Mountrail County (ND). Both the Palermo facility and the Keene terminal are set to connect to DAPL terminals in Stanley.