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Oneok Completes $1B of Midstream Infrastructure

Tulsa-based Oneok Partners LP said on Monday it has completed three natural gas gathering/processing and natural gas liquids (NGL) projects totaling nearly $1 billion. The projects are part of the company's previously announced $6 to $6.4 billion capital program through 2016, and the partnership has $2-3 billion in unannounced projects on the drawing board.

The three latest projects include:

  • 540-mile, 16-inch diameter NGL pipeline from the Midcontinent to the Gulf of Mexico (GOM) coast;
  • 200 MMcf/d gas processing facility in Oklahoma; and
  • Ethane/propane splitting at a Texas NGL storage facility.

CEO Terry Spencer said the investment demonstrates Oneok's "ongoing commitment" to building infrastructure for its producers and other customers. "Each of these projects integrates with our existing assets in the midstream value chain."

The Sterling III Pipeline would have a capacity to transport 193,000 b/d of either unfractionated NGLs or NGL purity products from Oneok's NGL infrastructure at Medford, OK, to its storage operations at Mont Belvieu, TX.

The partnership's existing Sterling I and II pipelines are being reconfigured to transport either unfractionated NGLs or NGL purity products, and that updating should be completed in the second quarter this year, a ONEOK spokesperson said. The cost of the Sterling III pipeline and the reconfiguration work is estimated to be $760-790 million.

Spencer said the latest pipeline is the partnership's fourth NGL pipeline connecting the midcontinent with the GOM. The new line and reconfiguration gives Oneok increased flexibility and the ability to increase NGL volumes flowing from Oklahoma to the Gulf (see Shale Daily, May 4, 2011).

"The Sterling III pipeline traverses the NGL-rich Woodford Shale and provides transportation capacity for NGL production from the growing Cana-Woodford Shale and Granite Wash, where new natural gas processing plants are being built as a result of increased drilling activity in these areas," the spokesperson said.

Mont Belvieu also is the site of the new ethane/propane splitter facilities, a $46 million project, producing purity ethane and propane. The facility has a capacity of 32,000 b/d of purity ethane and 8,000 b/d of propane.

The gas processing facility, Canadian Valley, and related infrastructure are located in the Cana-Woodford Shale in Oklahoma. It cost between $340 million and $360 million, according to the spokesperson.

The facility is located in what Spencer called "the heart" of the Cana-Woodford and is connected to the partnership's existing natural gas and NGL pipelines. There are growing production volumes of NGLs in the area, and Oneok has substantial incremental processing capacity to handle the growth, Spencer said.

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