The Enid News and Eagle, Enid, OK

April 6, 2013

Execute the plan

Hiland Partners continues to grow in Enid and beyond

By Jeff Mullin, Senior Writer
Enid News and Eagle

ENID, Okla. — In the past year, Hiland Partners has been on the move — in the oil- and gas-rich regions of North Dakota and Montana, as well as right here in Enid.

Hiland, a midstream energy company, relocated its headquarters late last summer, moving from the former Continental Tower South across the street north to the building formerly occupied by Continental Resources, a facility now known as Hiland Tower.

“That was a big thing for us, moving over here and getting more space,” said Derek Gipson, executive vice president and chief financial officer for Hiland Partners. “We are growing like everybody else here in Enid.”

In the past year Hiland has grown from 201 to 245 employees company-wide, while increasing from 55 to 74 employees in Enid.

“We just continue to execute our plan on the Bakken play in North Dakota and Montana,” said Gipson, “building critical natural gas and crude oil midstream infrastructure to help all the producers obtain their goals, keep their products moving.

“We’ve been adding folks and trying to stay ahead of all of our growth plans up there.”

The oil-and-gas rich Bakken play continues to grow, and Hiland is trying to keep up with it, Gipson said.

“The producers now are moving to development mode,” said Gipson, “and they are exploring different layers of the play. Production will continue to grow in the basin. We’re just trying to stay in front of it from our end and make sure we’ve got adequate capacity in all our facilities to make sure we give good service to all our customers.”

Hiland executives spend a great deal of time planning, and communicating with customers, in order to meet the growing demands of the Bakken play.

“Our producers are generally very good at giving us drill schedules that go out into the future, so we can plan, so we can make sure we keep the hydrocarbons moving,” said Gipson. “We spend a lot of time. It’s really a company-wide team effort of the financial modeling people modeling out the production curves, engineers looking at our facilities and the operational people coming together to come up with a game plan.

“I think you’ll see us continue to add on to our facilities in North Dakota and Montana. As the production grows, so should our midstream assets, to make the best of the opportunity we have in that play.”

As a midstream company, Hiland gathers gas through pipelines at the well head and transports it to its processing plants, where the gas is treated for impurities and natural gas liquids like propane and butane are extracted. It then sells the so-called “dry” gas and natural gas liquids. On the crude oil side, Hiland gathers crude at the well head and delivers it to various long-haul pipelines in North Dakota and Montana, as well as rail terminals. Upstream firms locate and drill for petroleum, while downstream companies are involved in refining.

Last fall, Hiland announced plans to build a new 440-mile crude oil pipeline from Dore, N.D., to Guernsey, Wyo. There it will connect with the Pony Express pipeline, a former natural gas pipeline being converted to crude oil service by Tallgrass Energy Partners. That line eventually will be extended to Cushing.

“That’s a new line of business, long-haul interstate crude oil transportation, that we’re getting into,” said Gipson. “We expect that line to start moving barrels in late 2014. Construction will kick off in the back half of this year. That’s a key project for us to execute on.”

 Natural gas prices fell below $2 per million British Thermal Units last year, prompting Hiland to begin shifting its focus from natural gas to crude oil.

“We’re moving more into the crude oil midstream part of the business,” said Gipson. “We still are very active in gas gathering and will continue to be. Last year was a tough year for natural gas prices.”

In the Williston Basin of North Dakota and Montana, Gipson said, Hiland has processing capacity for 190 million cubic feet of natural gas per day at four facilities, as well as nearly 1,500 miles of gathering pipelines. Hiland has more than 17,000 barrels per day of natural gas liquid fractionation capacity. On the crude oil side, Hiland has nearly 750 miles of pipelines.

Topping the list of Hiland’s core values is safety, a philosophy that was borne out recently when the company won first place in its division of the company safety awards given annually by Gas Processors Association.

“It’s the first time in the history of the company that we’ve won it,” said Gipson. “We’re really proud of that honor. When you think about how many people we’ve added in the company and expanded operations, to win that during that time frame is a big thing.”

With most of its assets in North Dakota and Montana, Hiland executives spent much of their time on the road.

“We make a concerted effort to get our key folks up there on a regular basis,” said Gipson. “We always have key people on the ground in North Dakota staying on top of everything we’re doing. Our CEO (Joseph Griffin) goes up there every Thursday. He spends the whole day monitoring construction progress with our folks on the ground.

“You have to pay attention to it. It’s a long way away from home, but we’ve got a rhythm where we’re able to manage it from here in Enid.”

There are advantages to being headquartered in Enid, Gipson said, other than the obvious, that the winters here are much milder than in North Dakota.

“There’s good talent from a corporate standpoint to help support our business, and Enid’s a business-friendly community,” he said.