The output of associated gas in two counties within the Bakken core has already exceeded local processing capacity, and will impact production growth, according to ESAI Energy’s December North America Watch. Associated natural gas output is rapidly increasing from the core counties in the Bakken. Gas processing capacity has increased over the last several years to meet rising production needs, and two more processing expansions are expected in 2018 and 2019 that will add a combined 320 mmcfd of capacity in McKenzie county. But there still may not be enough capacity in other core counties by 2019 and crude production growth will suffer.

The state-wide gas capture requirement as established by the North Dakota Industrial Commission is set to rise from a current level of 85 percent, to 88 percent by November 2018, and to over 90 percent by 2020. If these requirements are not met, production restrictions may be placed on crude oil producers. Elisabeth Murphy, analyst at ESAI Energy, points out that “either official restrictions on production or lack of access to gas processing could limit crude growth in 2019, unless these bottlenecks are addressed.”

The start-up of the 520,000 b/d Dakota Access Pipeline last June gave Bakken producers a boost.  As pipeline constraints disappeared, output was no longer dependent on costlier rail transport to get to markets. More Bakken barrels are making it to the USGC, improving prices for producers. Since June, drilling activity has picked up, more DUC wells have been completed, and production is back over 1.1 million b/d. ESAI Energy forecasts Bakken crude production to grow by nearly 90,000 b/d in 2018 year-over-year.

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