ONEOK cancels Wyoming pipeline for Bakken oil

2012-12-05T07:00:00Z 2012-12-29T19:18:32Z ONEOK cancels Wyoming pipeline for Bakken oilBy JEREMY FUGLEBERG Star-Tribune business editor Casper Star-Tribune Online

A Oklahoma-based company says it’s nixing plans to build a pipeline across Wyoming to transport oil from North Dakota’s Bakken field to Oklahoma.

ONEOK Partners LP said on Nov. 27 it’s canceling plans for the $1.5 billion-$1.8 billion pipeline because the company didn’t get enough long-term deals to transport crude in the so-called Bakken Crude Express.

The proposed 1,300-mile pipeline would have carried 200,000 gallons of oil a day. It was to run alongside ONEOK’s Bakken Pipeline for natural gas liquids, which is currently under construction. Construction would have begun on the oil pipeline next year and finished in 2015 if the company and oil suppliers had completed negotiations.

ONEOK’s natural gas liquids pipeline has been a source of controversy in Montana and northeast Wyoming, where some people have expressed concern about the line’s location and installation.

The 500-mile pipeline will move natural gas liquids — ethane, propane, butane and natural gas — from a gathering point in eastern Montana through eastern Wyoming and into the Overland Pass Pipeline in Colorado.

ONEOK Partners President Terry K. Spencer highlighted the NGL line as a reason the oil pipeline may yet be built.

“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 said in a media release.

ONEOK leadership appears to hold out hope the change of plans is only a delay for the pipeline from the Bakken field, where producers have suffered from a lack of infrastructure to move their product.

ONEOK Chief Executive John Gibson referred to the project as postponed at an investors conference last week and said shippers weren’t interested in sending oil to the saturated oil storage hub of Cushing, Okla., the Wall Street Journal reported.

“Producers need to decide where they ultimately want their crude oil to end up,” Gibson said at the conference, according to the Journal’s Ben Lefebvre. “We still believe that the efficiency and reliability of pipelines will provide the most efficient solution” for transporting crude oil from the Bakken shale formation.

Reach Jeremy Fugleberg at 307-266-0623 or Read his blog at and follow him on Twitter: @jerenergy.

Copyright 2015 Casper Star-Tribune Online. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(7) Comments

  1. Sage52
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    Sage52 - December 05, 2012 6:15 pm
    Rigrat is more spot on than you ever are.
  2. GameOn
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    GameOn - December 05, 2012 4:07 pm
    Not surprisingly, I have to call BS on rigrat. Crude hovered around $85 for most of 2011. Prior to that it was the spring of 2008, when gas was pushing $4 a gallon. So I'm not quite sure which "last time" you're referring to. How bout you give us some dates?
  3. rigrat
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    rigrat - December 05, 2012 1:02 pm
    The last time crude was in the $85 + range,gas was $2.50/gallon, so someone is making a fast buck somewhere.
  4. HogaRock
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    HogaRock - December 05, 2012 10:36 am
    Greed? if you call wanting to make a small profit on selling refined petroleum then I guess that is greed. Gas stations make maybe a few pennies on the dollar on their gasoline sales. The profit for a gas station/convenience store is the stuff sold inside the store. That's what makes or breaks a convenience store, not the gas they sell.

    As far as the price of crude it is controlled fundmentally by global supply and demand. Supplies have risen substantially recently, but the finding costs for those barrells is also very high. Each and every Bakken well that is drilled up in ND and MT cost $8-10 million dollars each. That requires a fair amount of oil at a high enough price to payout. Enough needs to be made per well to justify the continued drilling of those expensive wells. That is true for much of the rest of the world. Finding costs have risen substantially, and as a result the price for crude oil has risen. If it were to fall substantially you would see rigs stacking out and production falling rapidly. Which would in turn quickly decrease supply. Which would have upward pressure on prices until such time as those rigs would go back to work drilling those expensive wells. Unless huge new supplies of relatively cheap oil is found I don;t see prices dipping much below $50 a barrel anytime soon. If it does drop below that it won't be down for long.
  5. rigrat
    Report Abuse
    rigrat - December 05, 2012 9:00 am
    Gas prices may be cheap where you live,pal,but in other areas of the "Cowboys state" as you put it,gas prices are a lot higher. There is no reason other than outright greed for fuel prices being at these levels given the crude prices are where they are at,and have been for awhile. Furthermore,your rant about gas prices has nothing to do with this article.
  6. HogaRock
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    HogaRock - December 05, 2012 8:41 am we basically have the lowest gas prices in the nation here in Wyoming. That doesn't stop you from complaining about the prices we pay here in the Cowboys State? We sure are getting royally screwed here.
  7. rigrat
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    rigrat - December 05, 2012 7:27 am
    “Producers need to decide where they ultimately want their crude oil to end up,” Gibson said at the conference, according to the Journal’s Ben Lefebvre. That's a no brainer...wherever they can get the most money,most likely on the world market,which does nothing to bring down fuel prices in this area.
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