- Associated Press - Monday, May 19, 2014

TIOGA, N.D. (AP) - Oil conglomerate Hess Corp. on Monday showed off its upgraded gas plant in Tioga to North Dakota officials.

Hess Chief Operating Officer Greg Hill said the upgrades have allowed it to increase how much natural gas it captures, rather than flaring it. Oil companies sometimes burn off natural gas where it’s found, rather than gathering it and processing it for the market, because they lack the infrastructure to handle it.

Hill said that since the upgrades, Hess has reduced natural gas flaring from between 25 and 30 percent to between 15 and 20 percent. The company expects to reduce its flaring in North Dakota to below 10 percent in coming years.

“I think this day will go down in history as one of the greatest accomplishments in the history of our state,” Gov. Jack Dalrymple said.

The upgraded plant went live on March 23. Members of the media were not part of Monday’s tour.

In March, the latest month for which figures are available, North Dakota burned off 33 percent of natural gas. In December, the flared 36 percent of its gas. Nationwide, around 1 percent of natural gas is flared, according to the U.S. Energy Department.

Upgrade work took about five months to complete. Hess did not disclose the cost of the upgrade, but company spokesman John Roper said it represents a major chunk of a $1.5 billion investment Hess has made toward gathering natural gas in the state.

In a statement, U.S. Sen. Heidi Heitkamp welcomed the reduction of flaring.

“For years, we have wasted valuable natural gas through flaring, but with critical investments in processing capacity, like we are celebrating today, we can move toward energy independence,” said Heitkamp, who did not join Monday’s tour.

Before the plant’s expansion, it could process 100 million standard cubic feet of gas per day. That number has risen to 120 million standard cubic feet of gas today and will reach 250 million soon.

Beyond handling natural gas from Hess sites, the company says the plant will process gas from other companies as well.

Dalrymple and U.S. Sen. John Hoeven mentioned that Hess has been operating in North Dakota since the 1950s and stayed in the state even through the worst bust cycles of the state’s once struggling oil industry.

“For a big corporation like Hess, there is every day an opportunity to make a big investment anywhere in the world,” said Dalrymple. “And they can choose to invest in Tioga, North Dakota, or they can choose to invest in Iraq - and John Hess chose to invest here.”

Hess is one of the top producers in the Bakken, producing between 80,000 and 90,000 barrels of oil per day. The company anticipates producing 150,000 barrels of oil per day in North Dakota by 2018.

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