Jun. 4--Interest by a Houston company in loading its gas pipeline with Bakken sweet crude oil is encouraging to the head of North Dakota's Pipeline Authority.

Justin Kringstad, who directs the relatively new authority for the State Industrial Commission, said this week's announcement by Kinder Morgan Energy Partners that it would convert 30,000 barrels per day of gas pipeline capacity to handle crude produced in the Bakken formation is good news for North Dakota.

Kinder Morgan is looking for transportation agreements from oil producers who will commit to using the pipeline for three or five years starting in 2011. The company announced an "open season" on receiving those agreements until July 17.

The Bakken crude would be loaded into the company's Cochin pipeline, which starts in Alberta and delivers to points in Minnesota, Ohio and Michigan.

The company would load Bakken oil onto the pipeline in McHenry County near Highway 2 and construct a truck terminal to accommodate delivery.

The company says it needs signed agreements because of the "significant investment" in facilities and in modifying the gas pipeline to transport crude oil.

Besides this pipeline, Kringstad said the Enbridge Pipeline also plans to expand its capacity to handle 51,000 barrels per day of North Dakota oil production starting in 2010.

He said the additional Enbridge capacity is expected to provide adequate pipeline capacity -- a bottleneck to robust production -- and oil producers will determine whether even more capacity via the Kinder Morgan line will be necessary by 2011.

North Dakota oil production from the Bakken formation, which has an estimated reserve of 4.3 billion barrels, totaled 27 million barrels in 2008, compared to 1 million in 2005.

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