Oneok announced the sale last week of some processing assets, and the company said it is looking for new opportunities, possibly other processing plants, distribution systems or reserves.

Koch Midwestern Processing Co. acquired 100% ownership of 11 gas processing plants in western Oklahoma by buying the remaining 50% interest in each from Oneok Products. Koch Midstream – known as Tonkawa Gas Processing before a year-end name change – already owned 50% of each facility. Koch is the operator of the plants, which have a maximum gross gas capacity of 475 MMcf/d and a maximum gross gas liquids production capacity of 31,000 barrels/d. The plants process gas gathered through 3,000 miles of gathering lines operated by Koch Oklahoma Midstream Services, as well as gas from other Oklahoma pipelines. Financial details were not disclosed.

“Acquiring Oneok’s interest in the Oklahoma plants is a logical consolidation of ownership; it will enable Koch to be more flexible in structuring services for our producers and customers in the areas of gathering, processing, transportation and marketing,” said John Gibson, Koch Midstream president. Koch Midstream acquired Tonkawa Gas Processing and Delhi Gas Pipeline in November when it acquired The Delhi Group from USX Corp. The Delhi Group acquisition included pipeline systems and associated treating and processing plants in Texas and Oklahoma.

In a separate transaction, Koch Oklahoma Midstream Services will buy, effective March 1, a Oneok gathering system in western Oklahoma, which feeds into Koch’s Oklahoma gathering system. It consists of about 95 miles of 12-inch and smaller pipeline.

Oneok spokesman Weldon Watson said the processing assets sold were not as attractive to the company because Oneok did not own any gathering assets behind the plants. “Gathering has become a very competitive business, and the plants have greater value for those who actually own the gathering behind the plants.” Also, plants in the transactions are “shrinking fuel” rather than “percent-of-proceeds” facilities, which makes them more vulnerable to volatility in gas prices, Watson said.

Joe Fisher, Houston

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