ONEOK, Inc. today announced plans to invest approximately $1.4 billion to construct a new pipeline, and related infrastructure, to transport natural gas liquids (NGLs) from the Rocky Mountain region to the company’s existing Mid-Continent NGL facilities.
The Elk Creek Pipeline – an approximately 900-mile, 20-inch diameter pipeline that is expected to be completed by the end of 2019 – will have the capacity to transport up to 240,000 bpd of unfractionated NGLs from near the company’s Riverview terminal in eastern Montana to Bushton, Kansas. The Elk Creek Pipeline is expected to cost approximately $1.2 billion, with related infrastructure costs expected to total approximately $200 million. The pipeline will have the capability to be expanded to 400,000 bpd with additional pump facilities.
“The existing Bakken NGL and Overland Pass Pipelines are operating at full capacity,” said Terry K. Spencer, ONEOK president and chief executive officer. “Additional NGL takeaway capacity is critical to meeting the needs of producers who are increasing production and are required to meet natural gas capture targets in the Williston Basin.” The Elk Creek Pipeline will strengthen ONEOK’s position in the high-production areas of the Bakken, Powder River and Denver–Julesburgregions and also provide additional reliability and redundancy on our NGL system.”
The Elk Creek Pipeline is anchored by long-term contracts with terms ranging between 10 to 15 years totaling approximately 100,000 bpd, which is supported primarily by minimum volume commitments.
ONEOK expects to finance the Elk Creek Pipeline with a combination of new equity, including approximately $450 million of net proceeds received from common stock issued during 2017 under its “at-the-market” equity program, with cash from operations in excess of dividends and short- and long-term borrowings.