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Oneok Partners Buying Permian Basin-Focused NGL Pipelines

Oneok Partners LP is buying Texas natural gas liquids (NGL) pipelines and related assets from affiliates of Chevron Corp. for $800 million.

The deal includes an 80% interest in the West Texas LPG Pipeline LP and a 100% interest in the Mesquite Pipeline, which combined consist of 2,600 miles of NGL gathering pipelines from the Permian Basin in southeastern New Mexico to East Texas and Mont Belvieu, TX. Oneok Partners will be the operator of both pipelines. The remaining 20% of West Texas LPG is owned by Martin Midstream Partners LP.

"Acquiring these natural gas liquids pipelines allows us to continue to serve producers in the Permian Basin and other multiple high producing NGL-rich basins, including the Williston Basin, the Powder River Basin, and the Cana-Woodford and Scoop plays in Oklahoma," said Oneok Partners CEO Terry Spencer. "The partnership's presence in the Permian Basin now is significantly stronger, and this acquisition establishes a new geographic region for natural gas liquids volume growth.

These acquired assets will increase the partnership's NGL gathering system by more than 60% to nearly 6,900 miles of NGL gathering pipelines. Oneok Partners' gathered NGL volumes are expected to increase nearly 40% to 800,000 b/d systemwide.

The West Texas LPG and Mesquite pipelines access NGL supply from producers developing the Delaware, Midland and Central basins in the Permian, in addition to the Barnett Shale, East Texas and North Louisiana regions.

Oneok Partners' unfractionated NGL capacity in the acquired system is expected to increase to 310,000 b/d through expansions based on expected producer commitments, the company said. The company expects to close the transaction in the fourth quarter.

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