June 12, 2019 / 3:49 PM / 8 days ago

North Dakota makes small bet on natural gas infrastructure company

FILE PHOTO: A natural gas flare is seen outside of Williston, North Dakota March 12, 2013. REUTERS/Shannon Stapleton

(Reuters) - North Dakota, home to the second-largest U.S. shale producing basin, has invested in a startup company that is proposing to develop new markets for shale gas and reduce unwanted burning of natural gas.

North Dakota’s government, in an unusual move, said it would invest $200,000 in natural gas infrastructure company Bakken Midstream Natural Gas LLC at a time when oil producers have been burning excess gas due to the shortage of pipelines to move it.

The shortage has resulted in nearly 20% of gas produced in North Dakota being flared, well above the state’s 12% target. The goal is to cut flaring to less than 9% by late 2020.

Raymond James analyst Muhammed Ghulam said no party was benefiting from burning the excess natural gas and that the state was losing out on taxes while also causing environmental concerns.

Ghulam also said the investment was “immaterial given the significant amount needed to fund infrastructure in the region”.

Reporting by Debroop Roy in Bengaluru; Editing by Anil D'Silva

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