Gas Gathering, Growth Projects Driving ONEOK Investments

September 2014, Vol. 241, No. 9

A Pipeline &Gas Journal Staff Report

In recent weeks, ONEOK Partners has announced multimillion-dollar investment plans in both North Dakota and Oklahoma for natural gas gathering, processing and growth projects related to resource development.

The company’s North Dakota plans call for $605-785 million to be invested between now and the third quarter of 2016 to:
• Build a 200 MMcf/d natural gas processing facility – the Demicks Lake plant – and related infrastructure in northeast McKenzie County, ND which will process natural gas produced from the Bakken Shale in the Williston Basin;
• Construct more natural gas compression to take advantage of additional natural gas processing capacity at the partnership’s existing and planned Garden Creek and Stateline gas processing plants in the Williston Basin by a total of 100 MMcf/d; and
• Build 12 miles of NGL gathering pipeline from the Demicks Lake plant to the partnership’s existing Bakken NGL pipeline.

“The Demicks Lake plant and additional natural gas compression will increase our natural gas processing capacity in areas that continue to be developed aggressively by crude oil and natural gas producers,” said Terry K. Spencer, president and CEO of ONEOK Partners. “The additional 300 MMcf/d in the Williston Basin will increase our natural gas processing capacity to approximately 1.1 Bcf/d in the region. Pending board approval, we expect to announce additional Williston Basin natural gas processing capacity by the end of this year.”

The Garden Creek III natural gas processing plant, originally scheduled for completion in the first quarter 2015, is ahead of schedule and slated for completion later this year, he said.

“The completion of this plant, now a 120 MMcf/d natural gas processing facility with the additional capital investment in compression, combined with other ongoing investments in the Williston Basin, will provide the partnership with additional natural gas and NGL volumes while also creating long-term value for our unitholders,” said Spencer.

Since 2010, ONEOK Partners has constructed or is constructing seven natural gas processing plants and related gas gathering infrastructure in the Williston Basin, which will increase the partnership’s gas processing capacity in the region by more than 10 times by the end of 2016 compared with 2010.

The Demicks Lake natural gas processing plant and related infrastructure are expected to cost $515-670 million and be completed during the third quarter 2016, and include:
• $330-430 million for construction of the Demicks Lake gas processing plant
• $185-240 million for construction of related natural gas infrastructure, including gas gathering pipelines and compression.

When completed, the Demicks Lake processing plant will be ONEOK Partners’ second 200 MMcf/d plant in the region. In November 2013, the partnership announced plans to construct the Lonesome Creek plant, a 200 MMcf/d processing facility, expected to be completed in late 2015.

In Oklahoma, ONEOK Partners plans to invest $365-470 million between now and the fourth quarter 2016 to:
• Construct a 200 MMcf/d gas processing facility – the Knox plant – and related infrastructure in Grady and Stephens counties to gather and process natural gas from the emerging South Central Oklahoma Oil Province (SCOOP).
“The Knox plant will increase our presence in the growing SCOOP play and increase our Oklahoma natural gas processing capacity to approximately 900 MMcf/d,” said Spencer.
The Knox plant and related infrastructure, including expansions and upgrades to the partnership’s existing gas gathering systems and compression, are expected to be completed during the fourth quarter 2016.

The $365-470 million includes:
• $175-240 million for construction of the Knox plant
• $190-230 million for construction of related natural gas infrastructure, including gathering pipelines and compression.

The Knox plant is the partnership’s first new plant to be built in the emerging SCOOP play and will process natural gas from secured acreage dedications in the area.

“This new plant will accommodate increased production of liquids-rich natural gas in the SCOOP play where we have substantial acreage dedications from active producers and will be located in close proximity to the partnership’s existing natural gas and natural gas liquids pipelines,” Spencer added.

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