Ethane-Fueled Plant Planned for North Dakota

A natural gas exploration company working in the Bakken Shale has announced plans to build a $400 million power plant in North Dakota that would run on ethane.

Bakken Midstream Natural Gas (BMNG) on Jan. 12 said it hopes to begin construction of the Williston Basin Energy Center in 2022. The company in a news release said the facility “will be the largest power plant to utilize advances in combustion turbine technology that enables ethane as its primary fuel source.” The plant is sited in the Mountrail-Williams Electric Cooperative territory near Williston, in the northwest corner of the state.

Ethane-blending capability comes from a combustion system developed by General Electric. Competitive Power Ventures uses the technology at its CPV Fairview Energy Center natural gas-fired, combined cycle plant in Pennsylvania. CPV Fairview was a POWER Top Plant award-winner in 2020.

North Dakota produces about 350,000 barrels per day of ethane, according to the North Dakota Pipeline Authority. Ethane comprises about 20% of the content of raw natural gas, an abundant fuel in the Bakken, which primarily covers western North Dakota and eastern Montana, along with small areas of Saskatchewan and Manitoba in Canada. The region is home to several gas-processing facilities, where ethane and other natural gas liquids are separated from methane, the main component of natural gas.

Mike Hopkins, CEO of Bismarck-based BMNG, on Tuesday said the new power plant would help lessen the amount of natural gas that is currently flared in the Bakken. The U.S. Energy Information Administration has reported about 19% of North Dakota’s natural gas production was flared in 2019; about one-third of the state’s production was flared as recently as 2014.

Flaring has been a target of environmentalists and others concerned about greenhouse gas emissions from oil and natural gas exploration, and producers have long sought ways to capture value from excess natural gas that otherwise would be flared.

‘Value-Added’ Projects

Hopkins, who has helped develop more than $12 billion of global natural gas-based infrastructure, said the plant could help bring more “value-added” projects to the region, something North Dakota officials have chased for years as they seek ways to use locally produced natural gas, rather than sending it via pipeline to other states.

“Despite lower oil production over the past year, associated gas will continue to be an issue for producers unless a value-added industry is developed right here in the state,” Hopkins said. Associated gas is the fuel recovered along with crude oil during drilling. “You have all this natural gas that comes with your oil … you’ve gotta keep the gas moving, or you won’t be producing your oil,” Hopkins said.

“Ethane has a higher heat content than pipeline-quality natural gas and leaving high volumes of ethane in the natural gas stream limits export capabilities and adversely impacts the downstream consumers of North Dakota’s natural gas,” Hopkins said. “What North Dakota does not have is a lot of the infrastructure, in fact most of the infrastructure you’d want to see,” he said, referring to the need for more local facilities that could use the state’s natural gas resources.

Hopkins, citing confidentiality agreements, did not disclose the new plant’s expected generation capacity, but said, “It’s going to be running pretty much 24/7 as a baseload plant.” The company said it has a signed agreement with an undisclosed ethane supplier. He said BMNG will co-own the power plant with an unnamed “utility partner.” He said his group is working to secure a purchase agreement for the plant’s power output.

Hopkins said land for the plant has been purchased, and the company has begun engineering and permitting work. The plant is expected to connect to the power grid via the Southwest Power Pool in Mountrail-Williams Electric Cooperative’s service territory, which covers northwestern North Dakota.

$25 Million in Funding

BMNG, founded in 2018, in October 2020 announced it had secured almost $25 million in two separate funding rounds, primarily for projects including ethane-fueled power generation and related pipelines and infrastructure. The capital raises were led by Steven E. Lebow, the company’s founder and executive chairman, along with other North Dakota business leaders. Lebow is known as the primary financier for several companies, including Costco Wholesale, PetSmart, and Dick’s Sporting Goods, according to BMNG. The company also secured a $200,000 investment from the North Dakota Dept. of Commerce in 2019.

“For more than three years, we have been working to address the challenges ethane poses to North Dakota’s oil and gas sectors and find innovative ways to address those challenges and meet the state’s new power generation needs,” Lebow said in a news release. “We set an extremely high bar for ourselves with the mandate to reimagine what is possible and re-engineer what exists to mitigate natural gas flaring, enable additional oil production, and productively utilize ethane through ethane-fueled power generation projects. With this Energy Center we have realized the first step of our broader value-added vision.”

North Dakota Gov. Doug Burgum said, “Utilizing our state’s abundant natural gas resources for ethane-fueled power generation right here in North Dakota is truly a game-changing development that will support long-term construction projects, create high-paying jobs and diversify our economy. We appreciate the innovative solutions and considerable talent that Bakken Midstream has brought to bear on the ethane opportunities and flaring challenges we face in the Bakken.”

Burgum, a Republican, in his State of the State address on Jan. 5, emphasized the state’s “historic opportunity to invest in infrastructure.” North Dakota leaders for years have discussed building a petrochemical industry in the state that would use ethane and other liquids.

Hopkins said his group decided on a power plant in order to have “something relatively near-term,” noting construction of the new plant is expected to take about two years. He said BMNG had discussed development of a larger natural gas-fired plant, but turned to ethane as the fuel as recent advances in turbine technology allow power generation from ethane. Hopkins said the technology has been used on small-scale projects in Asia.

North Dakota today has several natural gas-fired power plants, though most operate as “peaker” plants, coming online during periods of high demand for electricity. The Energy Information Administration says the state receives more than 60% of its electricity from coal-fired power plants. Wind power accounts for about 30% of the state’s electricity production.

Hopkins said emissions from the new ethane-fueled plant would be comparable to those from a natural gas-fired facility. BMNG also announced it plans to build a pipeline system to bring ethane to the new plant from regional gas-processing facilities.

—Darrell Proctor is associate editor for POWER (@POWERmagazine).