TIOGA Construction on a proposed liquid-gas pipeline in the Tioga area has been postponed until next year, should the North Dakota Public Service Commission grant the project the necessary permits.
An administrative law judge appointed by the PSC held a hearing on Hess Corp's $4 million pipeline project April 30 in Tioga.
The 3.6 miles of pipelines will originate at Hess' Tioga Gas Plant, about a mile east of Tioga, and end at the Tioga Rail Terminal, about a mile west of Tioga. From the terminal, product will be shipped by rail to markets in the United States and Canada.
The Tioga Natural Gas Liquids Pipeline consists of three pipelines. An 8-inch pipeline will carry propane and two 6-inch pipelines will carry butane and other natural gas liquids. The pipelines will be installed in a corridor where other pipelines already exist, including lines laid to carry product into the new gas plant.
The plant will produce 31,500 barrels per day to be transported by the pipeline, which will have the capacity to carry up to 63,000 barrels per day.
Hess currently ships processed liquids directly from the gas plant using the Burlington Northern Santa Fe rail line. The pipeline will replace this rail service and eliminate the need for BNSF storage track in Tioga.
"It gets liquid petroleum gas rail cars out of city limits into a secure facility," said Hess engineer Tyler Bohan.
Alternatives to the pipeline include trucking, resulting in an estimated 265 tanker trucks per day being loaded at the gas plant and off-loaded at the rail terminal. Another alternative would be continuing to ship the liquids by rail car from the gas plant, but Hess considers that option impractical due to cost and space issues associated with having to increase its rail infrastructure to accommodate increased plant production.
Last year, Hess began construction on a plant expansion estimated in 2011 to cost $235 million. The expansion is scheduled for completion in 2013. Capacity at the plant, built in 1954, will increase from 100 million cubic feet of natural gas daily to 250 million cubic feet.
The administrative law judge will be making a recommendation to the PSC regarding approval of the project. The timeline for the PSC to reach a decision is uncertain, but urgency has diminished with the company's decision to postpone construction. The delay relates to changes in construction scheduling of other projects at the plant that tie into the pipeline.
The hearing generated some concerns and questions but no official protest.
Nathan Germundson, Tioga Commission president, voiced concern about Hess operations around the city boxing in Tioga's ability to expand its borders but did not oppose the project. Germundson also noted that Hess received zoning for a rail terminal based on crude oil transport. No additional city action is required for Hess to transport natural gases, but the city requested to be kept informed about plans for the terminal.