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.