Crude oil prices and, just as important, the availability of pipeline takeaway capacity, have supported continued production growth in the Bakken. Good news, right? Except, that’s led to sharply increased output of associated gas in a region that for years has been playing catch-up on the gas processing capacity front. As a result, gas-flaring volumes have soared this year, putting pressure on crude-focused producers to slow down their drilling-and-completion activity. Things are finally getting better, though — 670 MMcf/d of processing capacity has come online in western North Dakota since late July, and another 200 MMcf/d will start up next month. That gives Bakken producers some room to grow but also poses a problem for Western Canadian producers, namely that more pipeline gas out of the Bakken means less room for Alberta and British Columbia gas on pipes to the Midwest. Today, we begin a short blog series on incremental Bakken gas processing capacity and its impacts on producers — and natural gas prices — up in Canada.
The Battle Rages On – Rising Bakken Gas Production Displacing Western Canadian Gas on Pipes
