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Oneok Adding to Cana-Woodford Gathering, Processing

Oneok Partners LP said it will invest $340-360 million by the first quarter of 2014 to construct a gas gathering and processing plant and related infrastructure in the Cana-Woodford Shale in Oklahoma.

The investments are to include $190 million for the construction of a 200 MMcf/d gas processing facility, the Canadian Valley plant, in Canadian County, OK, which is expected to be in service during the first quarter of 2014. The partnership said it also expects to invest $160 million for expansions and upgrades to its existing gathering and compression infrastructure, increasing capacity to 390 MMcf/d in the Cana-Woodford Shale.

"Additional natural gas processing infrastructure is necessary to accommodate increased production of liquids-rich natural gas in the Cana-Woodford Shale where we have substantial acreage dedications from active producers," said Oneok Partners COO Pierce H. Norton. "The new Canadian Valley plant will be located in the center of the prolific Cana-Woodford Shale and in close proximity to the partnership's existing natural gas and natural gas liquids pipelines."

The Canadian Valley plant will be the partnership's largest gas processing facility in Oklahoma and will increase its processing capacity in the state to 690 MMcf/d.

Drilling activity in the Cana-Woodford is up by about 15% from a year ago, according to NGI's Shale Daily Unconventional Rig Count. There were 61 rigs active in the play as of April 20, up from 59 the week prior.

Continental Resources (278,116 net acres) and Devon Energy (244,000 net acres) hold the largest net acreage positions in the Cana-Woodford. Significant positions are also held by Marathon Oil (160,000 net acres), Newfield Exploration (125,000 net acres) and Cimarex Energy (120,000 net acres).

Oneok Partners has announced planned investments of $4.7-5.7 billion through 2015 for growth projects in gas gathering and processing, natural gas liquids and crude-oil infrastructure. Earlier this month the partnership announced plan for a crude oil pipeline to serve Bakken Shale producers (see Shale Daily, April 10). The partnership also just announced a gas gathering system to serve the Bakken (see Shale Daily, April 9).

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