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Colorado Company Proposed Oil Pipeline In North Dakota

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BISMARCK, N.D. (AP) – A Colorado company is seeking shipping commitments from oil producers to use a proposed pipeline that would move 150,000 barrels of crude daily from western North Dakota’s booming oil patch to a pipeline hub in northern Minnesota.

Durango-based Saddle Butte Pipeline LLC said oil shippers have until March 16 to solicit interest in the 450-mile pipeline from Alexander, in McKenzine County, to Clearbrook, Minn.

“We don’t know what the response is going to be,” Greg Ward, a company vice president, said Thursday. “Commitments typically come in on the last day of the open season.”

If sufficient commitments are obtained, the company will then seek federal and state regulatory approval. Ward said the pipeline could be running late next year.

North Dakota was pumping a record 534,000 barrels daily in December, the latest figures available. State and industry officials say North Dakota’s daily production rate is expected to surpass those of California and Alaska within a year, trailing only Texas.

Justin Kringstad, director of the North Dakota Pipeline Authority, said the proposed pipeline would add capacity and expand the market of regional oil drillers.

North Dakota has only one oil refinery, the Tesoro Corp. plant near Mandan.

“This project is being put together to meet the need of growing North Dakota production levels,” Kringstad said. “We’re expecting North Dakota production to increase over the next 10 to 15 years.”

The project would be built by High Prairie Pipeline LLC, a subsidiary of Saddle Butte. Ward said the company has not estimated a cost on the proposed High Prairie Pipeline.

“We have not put a number out there because it’s so preliminary,” he said. “It would be less than $1 billion.”

The route for the 16-inch diameter pipeline would run due east from western North Dakota to the pipeline hub in Clearbrook, Ward said.

“It’s pretty much a straight-line shot,” Ward said. Ninety percent of the pipeline’s route would follow existing utility and roadway corridors, lessening the need to obtain easements and “minimizing the pipeline’s footprint,” he said.

The pipeline also would have a 17-mile spur in McKenzie County and an 8-mile spur in Mountrail County.

Ward said the project would employ about 2,500 people during its six-month construction phase.

By James MacPherson, AP Writer (© Copyright 2012 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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