ONEOK Partners To Spend $700+ Million To Build NGL Projects

September 2010 Vol. 237 No. 9


Officials with ONEOK Partners L.P. plan to spend $595-730 million to build NGL projects between now and 2013. Some $450 to $550 million will be used to build a 525-615-mile NGL pipeline that will transport 60,000 bpd of unfractionated NGLs from the Bakken Shale south through western North Dakota and eastern Montana to Wyoming, where it will connect to the 760-mile Overland Pass Pipeline near Cheyenne, WY.
Following receipt of all necessary permits, construction of the 12-inch pipeline will begin in the second quarter of 2012 and is expected to be completed during the first half of 2013. Supply commitments for the Bakken Pipeline will be anchored by NGL production from ONEOK Partners’ natural gas processing plants and from third-party processors.

The additional raw NGL volumes from the new Bakken Pipeline and other supply sources under development in the Rockies will require an investment of $35-40 million for ONEOK Partners’ anticipated 50% interest in the Overland Pass Pipeline that will boost capacity to the maximum of 255,000 bpd.
The partnership also will invest $110-140 million to expand and upgrade its existing fractionation capacity at Bushton, increasing capacity to 210,000 bpd from 150,000 bpd. The fractionator was expanded to its current capacity in 2008.

The Bakken Pipeline project and related expansions follow ONEOK Partners’ April 2010 announcement of more than $400 million of new growth projects in the Bakken Shale, including construction of a 100 MMcf/d gas processing facility in eastern McKenzie County in North Dakota – the Garden Creek Plant – that will double the partnership’s processing capacity in the region. ONEOK Partners is the largest independent operator of gas gathering and processing facilities in the Bakken Shale region, with a gathering system of more than 3,500 miles.

ONEOK Partners also plans to install seven additional pump stations for $36 million along its existing Sterling I NGL distribution pipeline, increasing capacity by 15,000 bpd, which will be supplied by the partnership’s Mid-Continent NGL infrastructure.

The Sterling I pipeline transports NGL purity products from the partnership’s fractionator in Medford, OK to the Mont Belvieu, TX market center and is operating at capacity. The pump station installation is expected to be completed in the second half of 2011.

In addition to the Sterling I project, the partnership continues to evaluate expansion of its Mid-Continent to Gulf Coast NGL distribution pipeline capacity, based on demand for its services.