Hess has opened the taps on an expansion of its natural gas processing facility in Tioga, North Dakota, that will help the US giant slash the amount of gas it flares from its wells in the Bakken tight-oil play.
The plant is currently processing about 120 million cubic feet per day of natural gas, up from 100 MMcfd before the expansion, Hess said. The expansion more than doubled the capacity of the plant.
Hess, combined with other Bakken players, will push through between 250 MMcfd and 300 MMcfd of natural gas as the plant ramps up to capacity.
The expansion will allow Hess to cut the amount of natural gas it is flaring from 25% to between 15% and 20%.
"The Tioga Gas Plant was built in 1954, just three years after we drilled the very first oil well in the state of North Dakota," said chief executive John Hess. "Since 2010, we have invested more than $10 billion in North Dakota, we currently have a 17-rig drilling programme with 2014 net production expected to average 80,000 to 90,000 barrels of oil equivalent per day, and are proud to contribute to the state’s economic success."
Hess plans to produce 150,000 bpd from the Bakken by 2018, chief operating officer Greg Hill said.
The expanded processing plant helps to address one of the most glaring issues in the Bakken – operators wasting hydrocarbons by flaring associated gas produced by Bakken oil wells.
Environmental groups have pointed out the practice is so rampant that flaring in the Bakken region shows up on photographs taken from space. Mineral owners in North Dakota have complained that operators are wasting valuable production and are not paying royalties on it.
To address that problem, industry has pitched a plan of expanding the pipeline and processing network with help from state government in the form of expedited permitting and tax incentives.
North Dakota politicians praised the move.
"I'm very excited about the opening of (Hess') expanded gas plant in Tioga," Governor Jack Dalrymple said in a statement. "It's an example of what we need to see, which is more capturing of natural gas and more added value to the product."