MDU Resources Group is advancing its proposed Bakken East Pipeline Project, a major natural gas infrastructure development that could require between $2.7 billion and $3.2 billion of investment and significantly expand the company’s existing capital program.
The company has executed precedent agreements with all customers that submitted binding interest during the project’s open season, representing nearly 1.2 billion cubic feet per day of firm natural gas transportation capacity. A negotiated option could increase the contracted volume to nearly all of the original open-season interest.
MDU continues to design Bakken East for approximately 1.4 billion cubic feet per day of transportation capacity. The final project design is being determined based on confirmed customer volumes and delivery locations ahead of a final investment decision.
The scale of the proposed project is particularly notable compared with MDU’s existing investment program. The company currently expects approximately $3.08 billion of capital expenditures from 2026 through 2030, consisting of $1.08 billion for electric operations, $1.35 billion for natural gas distribution and $643 million for its pipeline business. Investment in Bakken East is specifically excluded from that five-year capital plan.
At the upper end of its projected $3.2 billion cost, Bakken East by itself would be slightly larger than MDU’s entire currently outlined five-year capital expenditure program. If developed alongside the existing plan, the project could therefore nearly double the company’s total investment opportunity over the period.
MDU expects to file a Federal Energy Regulatory Commission Section 7(c) application for Bakken East during the fourth quarter of 2026. Phase One remains targeted to enter service in late 2029, followed by Phase Two in late 2030. The company continues to evaluate financing options for the development.
The project is one of several pipeline growth initiatives underway. MDU’s Line Section 32 Expansion Project remains on schedule for a targeted late-2028 in-service date, while the potential Minot Industrial Project could involve an approximately 90-mile pipeline connecting Tioga and Minot, North Dakota.
MDU is also benefiting from growing electricity demand. The company entered into an electric service agreement with Applied Digital to serve the Polaris Forge 3 AI Factory near Center, North Dakota, which could require approximately 430 MW at full capacity. Data center demand contributed to electric retail sales volume growth during the second quarter.
Second-quarter consolidated net income increased 55.5% year-over-year to $21.3 million, while diluted EPS increased to $0.10 from $0.07. MDU reaffirmed full-year 2026 EPS guidance of $0.93 to $1.00 and maintained its long-term EPS growth objective of 6% to 8%.
KEY QUOTES:
“We delivered solid second quarter results while continuing to position the company for long-term growth. Our utility businesses benefited from new rates, customer growth and investments such as Badger Wind Farm, while our pipeline business continued advancing strategic projects that have the potential to create meaningful value over time.”
“We are especially encouraged by the continued advancement of our proposed Bakken East Pipeline Project. We believe our progress with customer commitments demonstrates the project’s strategic value. We also remain encouraged by development activity across our service territory, including data center opportunities and growing infrastructure demand.”
Nicole A. Kivisto, President and CEO of MDU Resources
