ONEOK, Inc. announced Monday plans for $130 million in an expansion of its Mid-Continent natural gas liquids gathering system to better serve Oklahoma’s wildly-growing STACK oil play.
Backed by a long-term contract with a subsidiary of EnLink Midstream Partners, LP and EnLink Midsream LLC, the expansions will help handle expected volume growth in the play and should be completed by the end of 2018.
The projects include a 30-mile natural gas gathering pipeline and infrastructure through the heart of the STACK play in Blaine County. The estimated cost is $40 million and ONEOK executives expect construction to be finished by the end of 2017.
“Producers continue to accelerate their investments in the STACK due to the higher-return economics driven by strong crude oil and NGL-rich natural gas production rates,” said Terry K. Spencer, ONEOK president and chief executive officer. “This expansion of our NGL gathering system further underscores our ability to meet the NGL service needs of STACK-area natural gas processors and demonstrates our continued commitment to providing reliable high-quality service to our customers.”
Expansions include increasing capacity on the Sterling III Pipeline to 250,000 barrels per day (bpd) from 190,000 bpd and connecting ONEOK’s Arbuckle Pipeline to EnLink’s Cajun-Sibon Pipeline in southeast Texas. ONEOK’s Sterling III Pipeline transports either unfractionated NGLs or NGL purity products between ONEOK’s Mid-Continent NGL infrastructure and similar facilities on the Gulf Coast in Mont Belvieu, Texas.
ONEOK’s natural gas liquids segment currently gathers 150,000 to 200,000 bpd of NGLs out of the STACK and SCOOP plays and is connected to more than 100 third-party natural gas processing plants in the Mid-Continent. The NGL volumes from the EnLink plant connections and other production are part of an incremental 100,000 bpd of expected NGL supply out of the STACK and SCOOP plays that ONEOK expects to add to its system by the end of 2018.
In addition, to support the increasing producer activity in the STACK and SCOOP on dedicated acreage in the natural gas gathering and processing segment, ONEOK has entered into a long-term processing services agreement with a third party to gain access to an additional 200 million cubic feet per day (MMcf/d) of natural gas processing capacity in this region.
