Can the Bridger/Pony Express Alliance Compete with Dakota Access? - Part Three

Bakken Pipeline Competitive Netback Analysis

Plainview Energy Analytics

Apr 11, 2025

Transcript

Please reach out with questions or requests: matthew.lewis@plainview-energy.com

Can the Bridger Pony Express Pipeline Alliance Compete with Dakota Access?

Bakken Oil Transportation to the Gulf Coast: Competitive Dynamics in 2025

The third part of our series emphasizes the competitive dynamics for transporting oil barrels from the Bakken region, particularly in light of recent price fluctuations.

Bridger Pony Express Capacity Expansions: Equality and South Bend Projects

The discussion recaps the first two parts of the series, which covered expansions in the Bridger and Pony Express systems that have largely gone unnoticed. Bridger expanded its southern system in 2020 with the Equality expansion and its northern system to pull more barrels from the Bakken core via the South Bend expansion. Pony Express, meanwhile, laid new pipe from Guernsey to the Buckingham terminal, increasing capacity, and formed a joint venture with Bridger, who now holds a 25% common equity stake with an option for further investment. These expansions enhance their ability to transport Bakken barrels, though we note low oil prices (sub-$60) could limit production growth and potentially lead to increased competition for barrels.

Bakken Pipeline Netback Analysis: Bridger Pony Express vs. DAPL and Enbridge

The core of the video is a netback analysis comparing the costs and returns of moving Bakken oil to Cushing or the Gulf Coast via four major pipelines: Bridger/Pony Express, DAPL/ETCOP, Enbridge’s North Dakota system, and Enbridge Bakken route through Cromer. Using a $60 WTI Cushing price, we calculate netbacks by subtracting tariff costs, factoring in a $1.75 Gulf premium for pipelines reaching Houston. Bridger/Pony Express offers the highest netback at $55.28, followed by DAPL/ETCOP at $54.75, Enbridge’s North Dakota to Cushing at $54.42, and Enbridge’s Cromer to Gulf route at $54.20. The analysis is simplified, ignoring ancillary charges and crude quality differences, and assumes committed shipper rates, noting some pipelines may be full or have older committed rates.

Compare Bakken Pipeline Transportation Costs and Capacity Constraints

We also highlight the competitive landscape, with Bridger and Pony Express well-positioned due to available capacity and recent expansions, while DAPL/ETCOP remains strong and has long-term contracts. Finally, we caution about risks at Cushing, where egress constraints could widen the price spread to the Gulf, as seen historically (2018–COVID). This risk is lower in a $60 oil scenario but could increase with higher prices or global disruptions. We conclude by announcing a fourth part to the series to explore Cushing egress and access the risk of basis differentials going forward.