West Texas LPG Pipeline LP, a joint venture between Oneok and Martin Midstream Partners LP, said it plans to invest about $200 million to expand its natural gas liquids (NGL) system into the Delaware Basin.
The project would be supported by long-term dedicated NGL production from two planned third-party gas processing plants in Reeves County, TX, which Oneok estimates will product up to 40,000 b/d. The company expects the project would be completed by 3Q2018.
The extension would include the construction of a 120-mile, 16-inch pipeline lateral with initial capacity of 110,000 b/d, and two pump stations and pipeline looping along the existing West Texas LPG system.
"Extending the West Texas LPG Pipeline into the core of the Delaware Basin, one of the fastest growing plays in the U.S., positions the West Texas LPG system for significant future NGL volume growth," said Oneok CEO Terry Spencer.
West Texas LPG Pipeline is an NGL pipeline system that consists of 2,600 miles of pipeline in Texas and New Mexico, providing transportation services to the Mont Belvieu market center from nearly 40 third-party natural gas processing plants located in the Permian Basin.
Oneok bought NGL pipelines and associated assets in the Permian Basin from unnamed affiliates of Chevron Corp. in 2014, giving it an 80% interest in West Texas LPG Pipeline LP, and a 100% interest in the Mesquite Pipeline. Martin Midstream owns the other 20% of West Texas LPG Pipeline LP.