UPDATE 2-MDU Resources seeks more customers for proposed Bakken gas pipeline

Mon Mar 24, 2014 3:01pm EDT
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(Adds details on refinery progress, stock)

By Ernest Scheyder

NEW ORLEANS, March 24 (Reuters) - MDU Resources Group Inc is looking for more natural gas producers to sign up to use a planned $650 million pipeline that would transport the fuel through North Dakota to Minnesota, the company's chief executive said on Monday.

The company in January launched a 120-day period for prospective customers of the pipeline, the largest project in the company's history, to sign supply agreements to transport natural gas.

"We're encouraged by the reaction of the marketplace, but I'd be getting ahead of myself if I said we're ready to build," Dave Goodin, MDU's chief executive, said during an interview at the Howard Weil energy conference in New Orleans. "We need some binding commitments."

Goodin declined to specify how much business the proposed pipeline has inked so far.

"Ideally, we'll be oversubscribed," he said.

Given that roughly a third of all natural gas produced in North Dakota's Bakken shale is flared, pressure has been strong from political and environmental groups to build new pipelines. Yet with the cost of natural gas near decade-lows, producers have been reluctant to spend significant amounts of money to address the issue.

The pipeline would connect with similar pipelines from TransCanada and others, letting the natural gas be transferred farther and access even more markets. All natural gas pipelines out of the Bakken are at capacity and MDU's pipeline would create more transportation options for producers.   Continued...