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Denver — Although natural gas flaring in the Bakken Shale set records in 2018, those levels are starting to fall as the first of one of several processing plants planned for the play is now online, part of over $3 billion in investment activity expected in the coming year.

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A processing plant expansion pushed Bakken Shale dry gas production to a record 2 Bcf/d over the past week, according to S&P Global Platts Analytics data.

Bakken Shale production has been on the rise in 2018, although it failed to increase significantly in recent months due to processing and flaring constraints.

After closing out 2017 at just under 1.7 Bcf/d, Bakken Shale production pushed above 1.8 Bcf/d for the first time in August, but then hovered around 1.8 Bcf/d to 1.9 Bcf/d, as the region awaited additional processing capacity. The vanguard of said capacity is now online, with Oasis Midstream's Wild Basin plant posting record high deliveries of about 120 MMcf/d to its interconnect with WBI over the past week. Oasis confirmed to S&P Global Platts the plant was online.

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The plant delivered an average of 73 MMcf/d in 2018 up until this point, and never exceeded 103 MMcf on any day. Wild Basin's expansion from 80 MMcf/d to 260 MMcf/d was completed in November and it is now online. The extra Bakken Shale production is expected to make its way toward Chicago on the Northern Border Pipeline system at the expense of imports from Canada. Several processing plants and pipeline projects were announced or initiated construction in 2018, representing a combined investment of more than $3 billion, Justin Kringstad, director of the North Dakota Pipeline Authority, said during a December 21 conference call.

"This would be the most active investment period that we've seen in North Dakota in order to address gas capture," Kringstad said.

Four large-scale processing plants are expected to be completed in 2019, adding a combined 690 MMcf/d of capacity, which is more than the volume currently being flared.

However, construction of most of the projects is not expected to be completed until the middle of 2019 or at the end of year.

"Getting through winter and getting through the first quarter, things are going to remain likely challenging from the gas capture perspective," Kringstad said.

By the end of 2019, Kringstad projects North Dakota will produce 2.9 Bcf/d of gas and 1.49 million b/d of oil.

After flaring of associated gas produced in the Bakken Shale reached a new threshold of more than 0.5 Bcf/d, North Dakota and federal regulators, as well as upstream and midstream companies, started working together on plans to lower the ever-growing volumes of gas being burned at well sites.

RECORD FLARING

Bakken producers flared 527 MMcf/d, or 20%, of all the gas produced in the month of October, according to the most recent data released by the North Dakota Industrial Commission. It was the most gas flared in the state on record and largest percentage flared since August 2015.

"The signals I'm hearing from industry is they are going to slow investment in the first quarter of next year to some extent," Lynn Helms, director of the NDIC, said during the same conference call. "Our anticipation is we plateau or see much slower production growth from now through April or May. Investments in drilling, hydraulic fracturing and well completions are going to slow, but investments in gas gathering pipelines and processing are going to remain just as high as absolutely possible."

Between now and the first quarter of 2020, 1.23 Bcf/d of additional of new gas processing plant and plant expansion is projected to come online, according to Platts Analytics. The first was Wild Basin.

"The people turning on new gas processing plants both now and in the first and second quarter of 2019 are going to be really happy," Helms said, adding NGL "prices are also up, so there will be some market incentive to work on gas capture."

-- Brandon Evans, bevans@spglobal.com

-- Richard Frey, richard.frey@spglobal.com

-- Edited by Keiron Greenhalgh, newsdesk@spglobal.com