Proposed natural gas pipeline into Grand Forks wouldn't meet needs beyond those of Fufeng
Viking Gas Transmission, which applied for a $10 million grant from the North Dakota Industrial Commission to build a pipeline, recently discovered that it had erred on a grant application.
GRAND FORKS, N.D. — A proposed pipeline to supply natural gas for a proposed corn wet milling plant in Grand Forks likely would not have enough capacity for the city's future residential and commercial use, the North Dakota Pipeline Authority director says.
Viking Gas Transmission applied for a $10 million grant from the North Dakota Industrial Commission to build the estimated $26.1 million pipeline, but company officials recently discovered that their grant application had used incorrect numbers, Pipeline Authority director Justin Kringstad said.
“Assuming it gets built, with the information we have today, it suggests that there would be extremely limited or no gas available for residential and commercial use,” Kringstad said.
That could have implications for the proposed Fufeng Ltd. corn wet milling plant, as well as Northern Plains Nitrogen's proposed fertilizer plant and Epitome Energy's proposed soybean crush plant — all of which plan to build in Grand Forks.
Fufeng Group announced plans in November 2021 to build a corn wet milling plant in northwest Grand Forks. One of the keys to the success of the Fufeng project and the Epitome Energy project, proposed in late December 2022, is an adequate supply of natural gas. The Northern Plains Nitrogen project was first proposed nearly a decade ago and has yet to break ground. That project would use natural gas to produce ammonia, urea and other products.
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North Dakota lawmakers at a special legislative session in November 2021 made $140 million available to the North Dakota Industrial Commission for a matching grant to assist with construction of a high-pressure transmission pipeline to bring natural gas from the Bakken oil fields west to east across North Dakota, and $10 million for a smaller pipeline designated to transport natural gas to Grand Forks County, where it would be used in the proposed projects as well as for residential purposes.
While no companies had applied for the $140 million portion in three separate application periods , Viking, owned by ONEOKE in Oklahoma, applied April 28, 2022, for the $10 million portion to construct a 14-mile line.
More than 12 miles of the new pipeline would be along an existing pipeline east of Grand Forks on the Minnesota side of the Red River, according to ONEOK’s website. Once the natural gas was transported to East Grand Forks, Minnesota, it would flow through pipelines under the Red River, into Grand Forks.
However, once the numbers on the Viking application were corrected, it was learned that the natural gas would not flow under the river as needed, Kringstad explained. Unless another segment of pipeline is built under the Red River, the natural gas would “bottleneck” in East Grand Forks, and there would not be the excess capacity needed to supply any other residential or commercial needs beyond the Fufeng project, Kringstad said.
“This project will meet the corn milling needs, but I am not expecting any additional meaningful capacity beyond that," he said.
The inaccurate numbers means that the Viking Gas Transmission grant application, as it is now, is in limbo.
“We are considering what the next steps will be,” Kringstad said.
Kringstad said he contacted Grand Forks City Administrator Todd Feland about the errors in the grant application. Feland did not immediately respond to messages left by Agweek seeking comment.
Besides the error in the Viking Transmission grant application, Kringstad is concerned that the company requested to use the $10 million grant for buying down Fufeng’s firm transportation rate.
The intent of the $10 million grant is to provide financial assistance to build the natural gas pipeline, Kringstad said.
“Fufeng or another third party has the ability under the Precedent Agreement to supplement buy down so that a total of $10.5 million can be provided to Viking for this rate reduction. Any supplemental buy down will further lower Fufeng’s annual transportation cost,” the Viking Transmission grant application reads.
Kringstad expressed that concern at a House Appropriations meeting held Thursday, Jan. 12, at the North Dakota capitol in Bismarck.
“My recommendation is that we focus to get a new pipeline, rather than the buy-down scenario,” he told lawmakers at the meeting.