The Enid News and Eagle, Enid, OK

Agriculture and Energy 2011

March 26, 2011

‘It was lightning in a bottle’

Hiland Partners’ CEO appreciates opportunity to manage Enid-based midstream operations

— Ask Joe Griffin, president and chief executive officer of Hiland Partners, about his company’s No. 1 asset and he is quick to reply.

“Our No. 1 asset is our employees,” said Griffin.

Enid-based Hiland has 152 employees — 62 in Enid, 70 in Wyoming, Montana and North Dakota and 20 in southeast Oklahoma.

Hiland is a midstream energy company. While upstream firms do exploration and drilling and downstream companies are involved in processing and refining, the role of midstream operations is critical to both.

“We own and operate pipelines that collect natural gas and crude oil at the wellhead, and we then compress, process, treat and resell those products into the marketplace,” said Griffin. “We’re in between the producer and the main marketplace.”

Hiland owns and operates some 2,500 miles of pipeline that moves natural gas and crude oil; six processing plants; five crude oil truck unloading stations; and crude oil storage tanks.

With more than half its employees located more than 1,000 miles from its headquarters, communication is one of the challenges for company management.

“Our operating teams do a fantastic job of that,” Griffin said.

Hiland has been in business since the early 1990s. It is wholly owned by Harold Hamm, scion of Continental Resources, and his family, and Hamm is Hiland’s chairman of the board. Hiland is not a subsidiary of Continental, however.

“We are considered business affiliates,” Griffin said. “We are separate business entities.”

Hiland and Continental do a lot of business, Griffin said, but they are hardly his only customers.

“We have a positive and growing business relationship with Continental,” Griffin said, “but we also conduct business with a lot of third-party producers as well.”

Transporting and processing natural gas and crude oil carries with it a certain risk. That is why one word, safety, dominates Hiland’s mission statement.

Hiland has not had a lost-time injury since November 2007, Griffin said, accounting for nearly one million man-hours of work.

Earlier this month the company learned it had won the President’s Safety Award from Gas Processors Association for the second straight year.

“It’s one of the top awards you can receive in our industry,” Griffin said. “Our belief is everybody has a loved one that is counting on them to get home at the end of the work shift.”

As a small company, Griffin said, Hiland faces some unique challenges in the world of midstream energy business.

“There’s always going to be companies out there who are larger, have more resources in terms of staff and assets and a larger customer base,” he said. “But what I have found is if you are passionate about your desire to compete and win in business, it may be the single advantage that you have over those large companies.

“If our organization will bring its best each and every day, we’ll win more often and not.”

That passion to compete apparently is paying off. During the last quarter of 2010, Hiland signed deals with more producers and kicked off a capital investment program, largely in the Bakken shale play in North Dakota.

The company has begun a cryogenic natural gas processing facility capable of handling 85,000 million cubic feet per day, more than 550 miles of pipe to collect natural gas and crude oil, a 10,000-barrel-per-day plant to separate natural gas liquid products and a new rail terminal to transport natural gas liquids out of the Bakken area. In all, the project is expected to cost $250 million to $300 million before the end of 2013.

“We’re excited,” Griffin said. “It’s a very ambitious program.”

Despite increasing attention on the need for alternative energy sources, like wind or solar power, the oil and gas portion of the energy industry has a bright future, Griffin said.

“What I hope is our industry will play a key role in providing for the future energy needs of our country, but it won’t be the only role,” Griffin said. “We’re going to continue to need a well-balanced source of all energy sources over the long term.”

In the energy discussion, natural gas often is overshadowed by the debate over America’s dependence on foreign crude oil and the nuclear energy debate, which was renewed in the wake of the problems Japan experienced following a devastating earthquake and tsunami earlier this month.

“I hope over time that major changes in demand for natural gas could be an energy game-changer for the country,” Griffin said. “It’s plentiful, it’s available and it’s clean. I hope it will be one of our leading energy sources as we move forward. The good thing about natural gas is we have a lot of it within our shores. It’s not subject to a lot of the geo-political tensions that we see throughout the world with other forms of energy.”

Getting back to the firm’s top asset, its employees, Griffin expressed pride in the amount of involvement by Hiland workers in the Enid community. Hiland team members are involved in organizations like 4RKids, American Cancer Society, Habitat for Humanity, United Way and the annual Continental Resources Great Land Run benefiting Enid and Chisholm schools. Hiland employees also are involved with Enid and Chisholm public schools and Autry Technology Center.

“I’m extremely proud of our employees,” he said.

Griffin has been Hiland’s president and CEO since June 2007, when he joined the company, but his tenure in the energy industry is much longer. The Tulsa native, who has been married to his high school sweetheart, Denise, for 30 years, got his start as a welder’s helper in the pipeline construction industry, his father’s stock in trade. But that didn’t last.

“I enjoyed it, a lot. But the fact of the matter is I was too clumsy,” Griffin said, “always having accidents, always getting hurt. I think my dad and I didn’t think I would make it very long.”

Griffin then attended Oklahoma State University and, after graduation in 1989, managed a natural gas midstream startup company.

“It was myself, two of my colleagues and three metal desks,” Griffin said.

The company grew until, in June 2005, it was sold to the Southern Ute Native American tribe. He spent two more years working for the tribe, then met Hamm and received the offer to come to Hiland.

“Looking back it was lightning in a bottle,” Griffin said. “Hiland was a great company when I came here. It’s been a great opportunity for myself professionally, and Denise and I have really embraced the Enid community, as well.”

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Agriculture and Energy 2011
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