ONEOK To Expand NGL, Natural Gas Infrastructure

(August 16, 2019) — ONEOK (Tulsa) has reported plans to expand natural gas and natural gas liquids infrastructure between now and 2021, including the construction of a 200-MMcfd upgrade of the Bear Creek natural gas processing plant and related infrastructure in the Willison Basin.

In addition, mid-continent NGL fractionation facility expansions totaling about 65,000 bbld will be undertaken and additional NGL infrastructure will be built to increase capacity between the Elk Creek and Arbuckle II pipelines. Finally, a 40,000-bbld expansion of the West Texas LPG pipeline in the Permian Basin will be completed.

ONEOK said the projects are expected to be financed with cash generated from operations and short- and long-term borrowing. No equity issuances are expected. “These low-cost, capital-efficient expansions with attractive returns continue to demonstrate ONEOK’s ability to incrementally grow with our customers to meet their needs,” said Terry K. Spencer, ONEOK president and CEO.

“The Bear Creek plant expansion in North Dakota will provide needed processing capacity for producers actively developing the high-growth area of Dunn County, while also helping to address natural gas flaring in the state,” Spencer added. “Continuing to expand our West Texas LP pipeline system underscores ONEOK’s Permian Basin strategy to provide needed NGL transportation capacity to producers in the highly productive Delaware and Midland basins.”

The Bear Creek natural gas processing facility expansion and related infrastructure in Dunn County are expected to cost about $405 million and be completed in the first quarter of 2021. The expansion is sup- ported by acreage dedications with primarily fee-based contracts. ONEOK’s Willison Basin natural gas processing capacity will increase to more than 1.6 MMcfd following the completion of the Bear Creek expansion. It is expected to produce about 25,000 bbld of NGLs in ethane rejection, resulting in 225,000 bbld of raw feed contracted since the announcement of the Elk Creek Pipeline.

The West Texas LPG pipeline expansion is expected to cost about $145 million and be completed in the first quarter of 2021. The expansion is supported by long-term dedicated NGL production from third- party natural gas processing plants in the Permian Basin that are expected to produce up to 45,000 bbld of NGLs.

Since October 2017, ONEOK has introduced expansions totaling 160,000 bbld on the West Texas LPG pipeline system, among them a 40,000-bbld expansion that was placed into service in the fourth quarter of 2018 and an additional 80,000-bbld build-out that is expected to be completed in the first quarter of 2020.

The expansions to ONEOK’s mid-continent NGL fractionation facilities are expected to cost about $150 million, with 15,000 bbld forecast to be com- pleted in the third quarter of 2020 and 50,000 bbld in service by the first quarter of 2021. In expectation of accelerating volume growth from the Williston and Powder River basins, additional infrastructure will be built to increase connectivity between the Elk Creek and Arbuckle II pipelines.

(SOURCE: The Weekly Propane Newsletter, August 12, 2019)