Bakken plays big role in strong year for Crestwood

By Luke Geiver | February 18, 2020

Crestwood Equity Partners set a Bakken record to end 2019. The midstream provider with oil, gas, and water gathering infrastructure across several U.S. shale plays, said the 2019 volume expansions in the Bakken allowed the company to keep pace with the shale play.

Two projects in the Bakken drove Crestwood’s record year: the Arrow system used for oil gathering and the Bear Den II gas processing facility. The COLT hub transloading facility outside of Williston, North Dakota, is also seeing increased interest.

On the Arrow system, operators connected 42 wells resulting in 118 total three-product well connections in 2019 and enabled the Arrow system to achieve new quarterly gathering records on all three products. According to numbers from Crestwood, during the quarter, the Arrow system averaged crude oil gathering volumes of 124 MBbls/d and natural gas gathering volumes of 103 MMcf/d, both 50 percent above the fourth quarter 2018, produced water gathering volumes of 80 MBbls/d, an increase of 49 percent over the fourth quarter 2018, and processing volumes of 95 MMcf/d, an increase of 235 percent over the fourth quarter 2018.  Despite the increased oil gathering volumes, Crestwood had to spend time and money retrofitting sections of water gathering infrastructure that were acquired in 2013 from a private operator.

This year, Crestwood will invest in water gathering across the Bakken specifically, while it continues to grow its oil and gas gathering volumes. WPX Energy and XTO Energy will be its main customers. Roughly 120 three-product wells will be connected, helping to increase crude volumes by 20 percent, natural gas volumes by 35 percent and produced water by 50 percent.

At its COLT hub, Crestwood saw an increase in demand for Bakken crude from the East and West coasts looking for light sweet crude oil as feedstock. “Additionally, crude oil production growth in the basin now exceeds currently available pipeline capacity creating market opportunities for crude-by-rail,” Crestwood said. “As customers secure crude-by-rail capacity in the basin, the COLT Hub is seeing a transition from predominately spot contracts to customers willing to enter into longer term loading contracts. Crestwood expects these favorable market conditions to continue in 2020 which has driven the company to reinstate 24-hour loading operations of the facility by the end of the first quarter 2020.”