BISMARCK, N.D. (AP) -- The U.S. State Department has approved construction of the North Dakota portion of a gas pipeline from Tioga into the Canadian province of Alberta, Sen. John Hoeven said Tuesday.
The proposed $300 million, 430-mile Vantage Pipeline is slated to supply ethane from North Dakota's oil patch for Alberta's petrochemical industry beginning later this year, the Republican lawmaker said in a news release.
North Dakota's portion of the pipeline is about 80 miles long. A presidential permit from the State Department is required because the pipeline would cross the U.S.-Canadian border.
Ethane is colorless and odorless and extracted from raw natural gas. It's used to make plastics and for welding, and as an anesthetic and an agent for ripening fruit.
Nova Chemicals Corp., Canada's biggest plastics producer, announced in 2010 that it had signed a long-term agreement to purchase all of the ethane produced at Hess Corp.'s natural gas plant in Tioga, in northwest North Dakota. Nova Chemicals at that time also signed a shipping agreement with Mistral Energy Inc.
Justin Kringstad, director of the North Dakota Pipeline Authority, says North Dakota's Bakken shale produces high-quality ethane but that the valuable gas has not had a viable market until now. In Canada, ethane supplies have been shrinking, he said.
"Supplies have been declining in Canada so the plastics industry has been seeking out new sources, and the Bakken is the perfect location," Kringstad said.
Kringstad said construction of the pipeline's Canada portion already is underway and the North Dakota portion is slated to be completed later this year. The pipeline will be capable of carrying up to 60,000 barrels of ethane daily.
Hoeven said the new market in Canada also will help cut down on flaring in North Dakota, where about one-third of the natural gas produced in the state is burned off as an unwanted or unmarketable byproduct of oil production.
"It will enable us to reduce flaring in North Dakota and also reduce emissions where the natural gas is used by industry," Hoeven said.
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