Looking to keep up with increased natural gas production from the Williston Basin, Oneok Partners LP said it is planning a $30 million expansion of its Grasslands processing facility in McKenzie County, ND, that will increase capacity by approximately 60%. The company also said it wants to build a 440-mile natural gas liquids (NGL) pipeline that would extend from southern Oklahoma through the Barnett Shale in North Texas to the Texas Gulf Coast.
Grasslands, the partnership’s largest processing plant in the Williston Basin, is owned and operated by Oneok Partners’ wholly owned subsidiary Bear Paw Energy LLC. In total, Oneok Partners said it expects to spend about $90 million in 2007 for growth-related gathering and processing projects in the Rockies and the Midcontinent. The Grasslands plant expansion, which is already under way, will increase processing capacity to approximately 100 MMcf/d from the current 63 MMcf/d. As part of the project, Oneok said the plant’s fractionation equipment will be expanded, increasing fractionating capacity by 65%. The additions will come online in phases starting in the summer of 2007 through the first quarter of 2008.
“We’re coming off a record year of well connects in the Williston Basin, and we expect this high level of activity to continue,” said Pierce Norton, president of Oneok Partners’ gathering and processing business. “The expansion is needed to keep pace with this growth and allows us to better serve the increasing needs of our producer-customers.”
Bear Paw Energy has approximately 3,500 miles of gathering pipelines in the Williston Basin and will have more than 130 MMcf/d of processing capacity once the Grasslands plant expansion is completed. The facility extracts natural gas liquids and removes water and other contaminants from raw natural gas gathered in the basin. The remaining residue is compressed and delivered to interstate pipelines, including Northern Border Pipeline, which is 50% owned by Oneok Partners. The raw natural gas liquids extracted by the facility are fractionated and then transported to markets via truck and rail car.
As for the proposed NGL pipe, known as the Arbuckle Pipeline, Oneok said the estimated cost is $260 million and the project could be completed by early 2009 if all the necessary permits are obtained. The 12- and 16-inch diameter pipe would originate in Stephens County, OK, and be designed to initially transport 160,000 b/d of raw NGLs for delivery into the Mont Belvieu, TX, market center.
The proposed pipeline would interconnect with the partnership’s existing fractionation facility at Mont Belvieu and other Gulf Coast-area fractionators.
“Much like our previously announced Overland Pass Pipeline expansion into the Rocky Mountain region, the Arbuckle Pipeline will provide access to another area of rapidly growing natural gas liquids production, the Barnett Shale play in Texas,” said CEO John W. Gibson. “These areas are two of the most active for natural gas drilling in the country.”
The 750-mile Overland Pass Pipeline would extend from southwestern Wyoming to Conway, KS. The $433 million project is a joint venture between a subsidiary of Oneok Partners and a subsidiary of Williams. To see a map of the proposed Arbuckle Pipeline, click here.
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