MDU Resources Group Inc. got its start as a utility company in 1924 in the shadows of the Bakken region. Within a couple of years, it was providing electric and natural gas service to communities that today are in the heart of the oil and natural gas production boom in western North Dakota and eastern Montana.
MDU Resources knows the Bakken, having been successful in the region for nearly 90 years. The full-service energy, construction and utility company provides a single storefront for a wide variety of Bakken-area needs. The company produces oil and natural gas, builds pipelines, ships natural gas, constructs roads, oil pads and subdivisions, as well as sells construction materials and electrical supplies. And with its legacy company, it heats buildings and provides electricity.
Here’s a brief look at each company and its impact on the Bakken region:
MDU Resources’ utility company has seen tremendous customer growth over the past few years. The company has made large infrastructure investments—nearly $75 million in both 2012 and 2013—and has seen customer growth in the seven-percent range for electric and the nine-percent range for natural gas over the past couple of years.
As part of meeting the demand growth, Montana-Dakota has grown as well. Along with adding employees, the company has two construction projects underway—a new office and warehouse in Williston and Watford City.
Construction began in April 2013 in Williston on a new 5,000-square-foot office building and 20,000-square-foot warehouse, both at the same location. Construction in Watford City began in October 2013 for a 2,500-square-foot office and 10,000-square-foot warehouse, also both in the same location.
“The pace of the growth in the area has been tremendous and we are happy to have responded by growing our infrastructure, staff, office buildings and warehouses to best serve our customers,” says Frank Morehouse, president and CEO of Montana-Dakota.
Knife River Corp.
Knife River has been a part of a number of projects throughout the Bakken region, but a nine-mile, four-lane bypass project is the largest single road construction contract the aggregate-based company has been awarded in North Dakota.
The $55-million project includes moving about two-million cubic yards of dirt during the ground work, putting down about 500,000 tons of gravel road base and laying about 200,000 tons of asphalt. The bypass project will move traffic on U.S. Highway 85 around Watford City rather than through town on Main Street. The North Dakota Department of Transportation estimates the bypass will take about 3,700 trucks per day out of Watford City, thereby improving safety and congestion.
“We are excited to be involved in this project for a very important reason—this is a significant step forward for safety on the Highway 85 corridor,” states John Quade, president of Knife River’s north-central region. “It’s great to be on the team that is making Highway 85—and Watford City’s Main Street—safer.”
Work began on Sept. 30, 2013, and is expected to conclude by the end of October 2014.
MDU Construction Services Group
MDU Construction Services Group provides services essential to energy infrastructure networks, including electrical and mechanical services and connectivity. One of its subsidiary companies, Rocky Mountain Contractors, is playing a major role in building up the electric transmission and distribution lines and natural gas distribution infrastructure throughout the region for local utility companies.
“We are committed to quality work and top-notch customer service,” says CSG’s Bakken operations manager Greg Darkenwald. “With our skilled employees, our companies can handle projects of varying sizes throughout the Bakken.”
Rocky Mountain Contractors has completed distribution work that includes upgrading existing facilities and the construction of new electric substations. The company has also installed new transmission facilities to serve the expanding loads in the oilfield.
MDU CSG also features Energy Electrical Distribution Co. based in Williston. It’s a full-service sales office and warehouse that offers a wide array of industrial, commercial and residential electrical supplies.
Dakota Prairie Refining
One of most exciting projects underway within MDU Resources is the construction of the nation’s first greenfield refinery since the late 1970s. The company, in conjunction with Calumet Specialty Products Partners, is in the process of building a 20,000-barrel-per-day diesel topping plant in southwestern North Dakota near the town of Dickinson.
“Construction is proceeding on schedule. We completed much of the groundwork and foundations before winter arrived, allowing us to continue above-ground work,” says Steve Bietz, president and CEO of WBI Energy, the corporate subsidiary that will manage the refinery assets. “Building the tankage is proceeding along well and truckloads of materials are arriving daily. The project is in full construction mode.”
Construction began on the facility in late March 2013 and, when complete, it will process Bakken crude oil into diesel, which will be marketed within the Bakken region. Total project costs are estimated to be approximately $350 million with a projected in-service date in late 2014.
The pipeline company has been actively planning the largest pipeline construction project in its history. Current discussions point to a new pipeline in the neighborhood of 375 miles long with a project cost running upward of $650 million.
“We are excited about what this project offers for producers and downstream markets, as well as our company,” Bietz says.
In simple terms, the pipeline—proposed to stretch from western North Dakota to northwestern Minnesota—would transport Bakken-produced natural gas to interconnects with other transmission pipelines with access to markets in the Mid-Continent region of the U.S. and eastern Canada. The proposed project offers an incremental takeaway option out of the Bakken for existing and new production being gathered, as well as natural gas currently being flared. For the company, the potential new capacity boosts deliverability by just about one-third from a little more than 1.2 billion cubic feet of gas per day once current projects are completed to 1.6 BCFD. And, depending on user commitments, the new pipeline could be expanded to increase total system capacity to more than 1.7 BCFD.
Fidelity Oil and Exploration
The corporation’s exploration and production business continues to outperform its year-over-year production target. Fidelity increased third-quarter oil production by 37 percent from the same period last year, and is well-positioned to deliver on its annual growth target of 30 to 35 percent.
“The Bakken is key to our Rocky Mountain production activity and integral to our growth plan,” states Kent Wells, president and CEO of Fidelity. “It’s one of the hottest spots on the planet for oil and gas production and we are in the heart of it.”
Fidelity’s success with improved completion techniques in the Bakken helped increase oil production in that play by 41 percent in the third quarter, the most recent data available. The company owns a total of approximately 127,000 net acres of leaseholds in Mountrail, Stark and Richland counties. Fidelity has two rigs operating in the Bakken and net oil production for the third quarter of 2013 was approximately 8,300 barrels per day.
“The Bakken is our backyard,” says MDU Resources Group president and CEO Dave Goodin. “We’ve been successful here for nearly 90 years and have developed the resources and relationships to help other businesses and communities be successful here, too.”