Tulsa-based ONEOK, Inc. will invest approximately $1.4 billion to construct a new pipeline to transport natural gas liquids (NGLs) from the Rocky Mountain region to the company’s existing Mid-Continent NGL facilities, according to a company press release issued on Thursday.
The Elk Creek Pipeline will span nearly 900-miles via a 20-inch diameter pipeline. The project is expected to be completed by the end of 2019. It will have the capacity to transport up to 240,000 barrels per day of unfractionated NGLs from near ONEOK’s Riverview terminal in eastern Montana to Bushton, Kansas.
The pipeline is estimated to cost nearly $1.2 billion, with related infrastructure costs totaling $200 million. The Elk Creek Pipeline will have the capability to be expanded to 400,000 bpd with additional pump facilities.
“The existing Bakken NGL and Overland Pass Pipelines are operating at full capacity. Additional NGL takeaway capacity is critical to meeting the needs of producers who are increasing production and are required to meet natural gas capture targets in the Williston Basin,” said Terry K. Spencer, ONEOK president and chief executive officer. “The Elk Creek Pipeline will strengthen ONEOK’s position in the high-production areas of the Bakken, Powder River and Denver-Julesburg regions and also provide additional reliability and redundancy on our NGL system.”
The Elk Creek Pipeline is anchored by long-term contracts with terms ranging between 10 to 15 years while supported primarily by minimum volume commitments.
The Elk Creek Pipeline project is part of ONEOK’s $3.0 billion to $3.5 billion of potential capital-growth projects.