ONEOK to expand natural gas pipeline operations in the Permian Basin and Oklahoma

Tulsa-based ONEOK announced it is expanding its natural gas pipeline infrastructure in the Permian Basin and Oklahoma by up to 1.7 billion cubic feet a day.

The company said it wants to provide additional natural gas takeaway capacity in two of the nation’s most active production areas.

ONEOK’s announcement did not reveal a cost of the projects. But its WesTex Transmission system from the Permian Basin to interstate pipeline delivery points in the Texas Panhandle will be expanded by 150 million cubic feet a day. But there is the potential the line could also be expanded to 450 million cubic feet a day, depending on interest expressed in a follow-up open season.

The company is planning a 150 million cubic feet a day expansion of its system from two natural gas processing plants in the STACK and SCOOP areas to an eastern Oklahoma interstate pipeline delivery point.

Another project will include the 100 million cubic feet a day expansion of ONEOK Gas Transportation from Oklahoma’s STACK to multiple interstate pipeline delivery points in western Oklahoma. Like the Permian Basin project, the STACK effort might also be expanded to 300 MMcf/d, depending on interest expressed in a follow-up open season.

ONEOK also said it will undertake a project to make its Roadrunner Gas Transmission bidirectional. Roadrunner is a 50-50 joint venture with Fermaca Infrastructure B.V. which is a Texas intrastate pipeline system moving gas from Waha’s natural gas market hub to markets in El Paso. It will result in nearly 750 MMcf/d of eastbound transportation capacity from the Delaware basin to the Waha area of west Texas.

“These capital-efficient expansions, primarily through the addition of compression facilities, will quickly create critical takeaway capacity and offer additional optionality for natural gas producers in the Permian Basin and Oklahoma,” said Terry K. Spencer, ONEOK president and chief executive officer.

He said the projects are backed by several firm transportation commitments  and the total annual average adjusted earnings before interest, taxes, depreciation and amortization could be as high as $40 million.

The company said the westbound expansion of ONEOK Gas Transmission should be in the fourth quarter of 2018. The remaining three elements of the expansion won’t be finished until the first quarter of 2019.

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