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Oneok Proposes Up to $785M Pipeline Plan for Bakken Shale

Tulsa, OK-based Oneok Partners LP on Wednesday outlined plans for investing up to $785 million over the next two years to build natural gas and natural gas liquids (NGL) processing, compression and pipelines to move Bakken Shale-produced supplies from the Williston Basin in North Dakota.

In addition, the midstream player said its Garden Creek III natural gas processing plant, which is due to open early next year, is ahead of schedule and should be completed in the fourth quarter.

All of these projects are part of Oneok's previously announced six-year (2010-2016) $3.6 billion capital expenditure plan for North Dakota (see Shale Daily, May 20).

Overall, Oneok has announced $7 billion in capital projects through 2016: $3 billion in NGL projects and $4 billion in natural gas gathering and processing. Nearly $4 billion of the total is targeted for the Williston Basin.

Under a timeline of starting commercial operation by the end of the third quarter 2016, Oneok CEO Terry Spencer announced three new North Dakota projects:

  • A 200 MMcf/d gas processing facility, Demicks Lake;
  • An additional 100 MMcf/d of natural gas compression to take advantage of additional processing capacity at the existing and planned Garden Creek and Stateline plants; and
  • Construction of about 12 miles of NGL gathering pipeline from Demicks Lake to Oneok's existing NGL pipelines.

Oneok estimated that the projects will cost a total of $605-785 million. Since 2010, the company has constructed or is in the process of building seven natural gas processing plants and related gas gathering infrastructure in the Williston Basin, Spencer said. By the end of 2016, Oneok plans to have increased its overall gas processing capacity ten-fold since 2010.

The Demicks Lake processing facility and related infrastructure, which will be Oneok's second 200 MMcf/d plant in the area, is estimated to cost between $515 million and $670 million. That breaks down to $330-430 million for construction, and $185-240 million for gathering pipelines and compression.

Demicks Lake will be in McKenzie County, the same county in which the Oneok Garden Creek plant is located. Garden Creek II and III are currently under construction.

Noting that adding 300 MMcf/d of new processing capacity will bring Oneok's total in the Williston Basin to 1.1 Bcf/d, Spencer said the company is focused on areas of the basin that continue to be aggressively developed by crude oil and gas producers. "Crude oil and natural gas production in the Williston Basin continues to increase, and we remain committed to building essential gas gathering and processing infrastructure."

The additional compression is estimated to cost another $80-100 million to take full advantage of the new processing capacity at Garden Creek and Stateline, Spencer said. The completion for this part of the expansion is slated for the fourth quarter of 2015, he said.

The new NGL pipeline is estimated at $10-15 million. It will connect Demicks Lake to Oneok's Bakken NGL Pipeline and is scheduled for completion in the third quarter of 2016.

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