ONEOK Partners plans to invest another $260-305 million between now and the end of 2014 for new projects in the Bakken Shale in the Williston Basin, with most of the money earmarked for natural gas midstream projects.
The partnership estimated that it would spend $135-150 million to build the Stateline II plant in western Williams County, ND. The 100 MMcf/d facility is expected to be in service in the first half of 2013. In addition, the partnership plans to invest $80-110 million to expand and upgrade existing gathering and compression infrastructure to process natural gas liquids (NGL). Another $45 million would be spent between now and 2014 for new well connections associated with the Stateline II facility.
"The rapidly increasing crude oil drilling activity in the region necessitates additional capacity to gather and process the growing natural gas liquids-rich natural gas volumes," said ONEOK Partners COO Terry K. Spencer. "With more than 1.5 million acres dedicated to our facilities, we are well positioned to meet the needs of producers who are continuing to aggressively develop the Bakken and Three Forks formations."
The partnership previously announced plans to construct two other gas processing facilities in the region, the Garden Creek and Stateline I plants. When completed, the combined gas processing capacity of the Stateline II plant, the Garden Creek plant, the Stateline I plant and the existing Grasslands natural gas processing facility would be about 400 MMcf/d, nearly quadrupling the partnership's current processing capacity in the Williston Basin.
"The Stateline II natural gas processing plant -- along with our previously announced Stateline I and Garden Creek plants and our existing Grasslands plant -- will process natural gas gathered through our extensive gathering pipeline and compression infrastructure," Spencer said. "The size and reach of this gathering system and these modern, efficient plants will combine with our Bakken NGL pipeline to provide excellent performance and reliability. These projects also enhance our ability to deliver the natural gas and natural gas liquids to the market."
In aggregate, the Stateline II plant and related infrastructure are expected to generate earnings before interest, taxes, depreciation and amortization multiples of five to seven times, the partnership said.
In addition to the Stateline II plant, the partnership already has launched growth projects worth an estimated $1.5-1.8 billion that include:
The Stateline II plant is to be constructed adjacent to the Stateline I natural gas processing facility, which is expected to be in service in the second half of 2012. The Garden Creek plant is expected to be in service by the end of this year. When completed, NGLs produced from the partnership's gas processing plants would be delivered into its previously announced Bakken NGL Pipeline, scheduled for completion at or near the same time as the Stateline II plant (see Daily GPI, July 27, 2010).