Oneok Partners LP Thursday said it would spend between $980 million and $1.1 billion by 2014 on a slate of natural gas and natural gas liquids (NGL) midstream projects in Texas, Oklahoma and North Dakota.
The projects are:
“These projects reflect our continuing commitment to provide natural gas processing, and NGL fractionation and transportation capacity to producers actively developing shale plays within our operating footprint,” said Oneok Partners COO Pierce H. Norton.
Supply commitments, which are in various stages of negotiation for the expanded pipeline and new fractionator, will be anchored by NGL production from the partnership’s gas processing plants and from third-party processors, the partnership said. The Garden Creek II plant will be supported by acreage dedications.
The new MB-3 fractionator at Mont Belvieu is expected to cost $375-415 million and will be the partnership’s third fractionator there. MB-3 is expected to be in service during the fourth quarter of 2014 and will supplement the partnership’s 80%-owned, 160,000 b/d MB-1 fractionator, as well as the partnership’s 100%-owned, 75,000 b/d MB-2 fractionator, which is under construction and is scheduled for completion in mid-2013.
This investment also includes $150-160 million to expand the partnership’s Mont Belvieu NGL storage facilities, existing Oklahoma NGL gathering system, and the existing Arbuckle and Sterling II pipelines.
Oneok Partners owns an NGL system in the Midcontinent and Gulf Coast, which includes fractionators and storage in Mont Belvieu; Bushton, Conway and Hutchinson, KS; and Medford, OK. It also owns interstate NGL distribution pipelines between Conway and Mont Belvieu, and NGL and refined petroleum products distribution pipelines that connect its Midcontinent NGL infrastructure to Midwest markets, including Chicago.
The partnership is currently investing $610-810 million to construct a 570-mile, 16-inch diameter NGL pipeline (Sterling III Pipeline) that is expected to be completed in late 2013, to transport either unfractionated NGLs or NGL purity products from the Midcontinent to the Texas Gulf Coast, with an initial capacity of 193,000 b/d and the ability to expand to 250,000 b/d; and to reconfigure its existing Sterling I and II NGL distribution pipelines to transport either unfractionated NGLs or NGL purity products.
The Garden Creek II plant and related infrastructure, including expansions and upgrades to its existing natural gas gathering and compression, is expected to cost $310-345 million and is expected to be in service during the third quarter of 2014. The gas processing facility will be built adjacent to the partnership’s existing Garden Creek plant, which was completed in December 2011.
“The announcement of the Garden Creek II plant and related infrastructure increases our Bakken-related investments to approximately $3.6-4.2 billion for natural gas-, NGL- and crude oil-related infrastructure projects between now and 2015,” said Norton.
The partnership’s previously announced Stateline I and Stateline II gas processing plants are expected to be in service during the third quarter of 2012 and the first half of 2013, respectively. When completed, the combined gas processing capacities of the Garden Creek II plant, the Stateline I and II plants and the existing Garden Creek and Grasslands processing facilities, will be 490 MMcf/d in the Williston Basin.
The partnership said it will invest $100 million to install additional pump stations on the Bakken NGL Pipeline to increase its capacity to 135,000 b/d from an initial capacity of 60,000 b/d. The expansion is expected to be completed in the third quarter of 2014. The Bakken NGL Pipeline will transport unfractionated NGLs produced from the Bakken Shale to the partnership’s 50%-owned Overland Pass Pipeline, a 760-mile NGL pipeline extending from southern Wyoming to Conway. The Bakken NGL Pipeline is currently under construction and is expected to be in service during the first half of 2013.
The partnership will invest $45 million to install a 40,000 b/d E/P splitter at its Mont Belvieu storage facility to split E/P mix into purity ethane in order to meet the growing needs of petrochemical customers. The facility will be capable of producing 32,000 b/d of purity ethane and 8,000 b/d of propane and is expected to be in service during the second quarter of 2014.
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