BISMARCK – A Denver-based company that unveiled plans last fall for a $4 billion petrochemical plant in North Dakota said Friday it has entered into a long-term ethane supply agreement with one of the biggest players in the state's Oil Patch.
Badlands NGL said it has entered a "precedent agreement" with Continental Resources Inc. to supply the plant with ethane gas, a byproduct of natural gas processing that will be converted into polyethylene for use in a wide variety of plastic products.
"It's a great vote of confidence for our project that a highly respected company like CLR will be a supplier," Badlands CEO William Gilliam said in a news release.
The length of the agreement with Continental Resources, one of the largest producers and leaseholders in the Williston Basin, wasn't disclosed Friday. Gilliam told Forum News Service in June that the company was close to reaching a 10-year ethane supply agreement with one of North Dakota's top three producers.
Shane Goettle of the Bismarck-based firm Odney, a consultant on the project, said Badlands won't be able to draw on Continental's ethane until the plant is completed, hopefully in three to five years.
"It means that to the extent that they've got some uncommitted ethane, they will work with us to see if we can get it to the plant we want to build," he said of the agreement.
Badlands has not identified a location yet for the North Dakota plant, he said.
Gilliam also said in June that the company plans to build a second ethane plant in the continental United States. Goettle said the status of that project hasn't changed. Asked if they have a location, he said, "nothing that we're announcing."
Gilliam said that as a result of ongoing discussions with ethane feedstock suppliers in North Dakota and western Canada, Badlands is increasing the size of its planned North Dakota facility from producing 1.53 million metric tons annually to 2 million metric tons annually.
He said the company has signed licensing agreements with key technology partners and finalized other agreements during the past several weeks.
A Continental spokeswoman said the company had no comment beyond the news release.