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Fufeng project unhurt by natural gas pipeline setback, Grand Forks leaders say

In an April 29 letter first reported by The Associated Press, WBI Energy Transmission told North Dakota leaders that the construction of a state-spanning pipeline is not “commercially viable at this time."

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A sign on Highway 2 welcomes visitors to Grand Forks. (Grand Forks Herald)
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GRAND FORKS – Grand Forks’ major corn-milling project is not threatened by a lack of interest in building a state-spanning natural gas pipeline, multiple city leaders told the Herald this week.

Those reassurances come after no proposals were received by the state of North Dakota prior to a May 1 deadline to construct a major pipeline ferrying natural gas from western North Dakota to the eastern side of the state. Lawmakers last year made significant financing available for the project last year, part of a $150 million package for pipeline infrastructure.

In an April 29 letter first reported by The Associated Press, WBI Energy Transmission told North Dakota leaders that the construction of a state-spanning pipeline is not “commercially viable at this time,” owing to “high project cost estimates, increased regulatory uncertainty and limited in-state customer demand potential.” The letter also mentioned the rising cost of construction materials.

The setback appears to jeopardize flow of natural gas to the eastern side of the state, where significant projects like Grand Forks’ new corn-milling plant are expected to depend on the resource. But city leaders point out that a proposal for a smaller project linking Grand Forks to a nearby Minnesota natural gas pipeline has received interest and appears likely to go ahead as planned.

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Both City Administrator Todd Feland and local Economic Development Corporation CEO Keith Lund said that means the corn-mill project, from China-based Fufeng Group, does not stand to lose momentum from a slowdown in the larger pipeline project.

“Eventually it’ll be good for redundancy for them, if they want to look at longer-term expansion. But I think, for the Fufeng project, they’ve got their natural gas option,” Feland said.

In an email to the Herald, Fufeng USA COO Eric Chutorash concurred.

“The west to east North Dakota pipeline does not have any impact on our project or interest in Grand Forks,” Chutorash said.

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That mill, advancing now through early planning and vetting stages, is expected to bring more than 200 jobs to the city’s north end. It’s been at the center of a major debate in Grand Forks in recent months as the community weighs what proponents say will be a big economic boost versus local pushback on odor, traffic, cost and even the project’s connections to China.

Justin Kringstad, director of the North Dakota Pipeline Authority, said the recent lack of interest this week does not mean the end of the state’s hope to link western natural gas resources to the eastern side of the state.

“I think there’s still an overwhelming support at all levels to come up with some type of gas solution that benefits both halves of the state,” Kringstad said. “We still have tremendous need for gas capacity in western North Dakota. … It’s certainly something that’s going to continue to be explored, looking at what options may still exist and what next steps there might be.”

Mike Nowatzki, a spokesman for Gov. Doug Burgum, offered similar thoughts on Thursday.

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“We found tremendous statewide support for this concept and continue working toward solutions to bring natural gas from western to eastern North Dakota to support population growth and industrial uses including value-added agricultural processing,” he said in an email. “Western North Dakota also needs this outlet as takeaway capacity for abundant Bakken natural gas to avoid having to constrain oil production as the gas-to-oil production ratio increases.”

That’s important in Grand Forks, where Feland pointed out that big projects, like the much-discussed (though still unrealized) Northern Plains Nitrogen fertilizer plant, would need to rely on significant amounts of natural gas to function.

“I think it impacts Grand Forks for upcoming and future agribusiness opportunities. … What we need to do is solidify end-users in our area, in eastern North Dakota, to further justify moving that gas from western North Dakota,” Feland said. “We really need to solidify our economic development opportunities.”

Related Topics: BUSINESSGRAND FORKS
Sam Easter is a Michigan-based freelance reporter who has been a regular contributor to the Herald since 2019. He covers a variety of topics, including government and politics.

In 2015, he joined the Herald’s staff as City Hall reporter, covering North Dakota politics at all levels and conducting Herald investigations through early 2018, when he returned to Michigan and began his freelancing career.

Easter can be reached at samkweaster@gmail.com or via Twitter via @samkweaster.
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