Badlands NGLs, LLC Announces Updates on ND Plant

Posted: Aug 04 2015
William Gilliam, CEO of Badlands NGLs, LLC, shared valuable information at The Bakken Conference & Expo in Grand Forks, July 27-29, 2015. As North Dakotans have been patiently waiting for an update on the proposed $4 billion Badlands manufacturing plant, Mr. Gilliam had the whole room on their toes when he announced the plant will be $6.5 billion instead.

Last fall, Badlands announced the development of a North Dakota manufacturing plant that will convert ethane into polyethylene, which is used to make a wide variety of end-use consumer and industrial plastics. Since that announcement, many have wondered if a site has been selected or if the plant will be happening at all. Mr. Gilliam thoroughly explained the latest updates and covered the following topics at the conference:

• 2015-2020 Bakken Oil and Gas, NGL and Ethane Supply and Demand Estimatesbadlandsupdate15.jpg
• Economically and Physically Stranded NGL's and Ethane
• The "Marcellus/Bakken Disparity"
• Badlands Facility Plans and Schedules
• Challenges and Opportunities- Value Added Hydrocarbons in North Dakota
• By-Product Opportunities in North Dakota
• Potential Customer Interest in North Dakota polyethylene (PE)

Badlands plans to have two world scale PE facilities. The first one is called "Shangri-La" and will be located on the water (site selected, but unannounced). This facility will consist of $1.5 million MT design and modular construction. The second facility will be in North Dakota (site narrowed down). This facility will consist of a $2 million MT single train cracker and 135 Mb/d ethane. Once Shangri-La is up and running, the North Dakota plant will be established as quickly as sufficient binding ethane agreements are signed.

Mr. Gilliam elaborated on North Dakota PE challenges, opportunities, and by-product opportunities.

North Dakota PE challenges include:
• Climate
• Code Welders and similar crafts, skills, and trades during construction
• Peak construction headcount is over 9,000
• North Dakota's facility will differ from Shangri-La since on the water module delivery is not possible

North Dakota PE opportunities include:
• Excellent permanent workforce available statewide
• Higher education system is ideal for supporting value-added hydrocarbons
• Support of elected officials from both political parties
• Excellent regulatory environment statewide
• This facility will be closer to U.S. and Asian markets, less expensive and faster rail and ship transport options

North Dakota By-Products:
• Hydrogen- Used to manufacture ammonia fertilizer
• Nitrogen- Used to manufacture ammonia fertilizer
• CO2
• Typical Cracker By-Products, such as gas and propane

With a decline in oil prices, Badlands makes future plans with a "Base Case" of $70/BBL WTI in 2020. Although it won't be for a few more years, when this manufacturing plant is established in North Dakota- it's going to transform the economy and open many doors of opportunities.