Tulsa-based ONEOK Inc. announced this week it intends to spend $2.3 billion in constructing new natural gas systems in the coming two years. Plans call for projects in Oklahoma, Texas and North Dakota.
“With more than $4 billion of announced capital-growth projects since June 2017, we continue to build off of our significant asset footprint,” said Terry K. Spencer, ONEOK president and chief executive officer.
The projects include construction of a new 400,000 barrel a day natural gas liquids pipeline called the Arbuckle II pipeline. The 530-mile line will create more NFL transportation capacity between ONEOK’s Mid-Continent infrastructure in Oklahoma and the firm’s existing NGL operation in Mont Belvieu, Texas.
The company intends to have it in operation by the first quarter of 2020. The 24 and 36-inch pipeline will cost $1.6 billion. More than 50 percent of the initial capacity has already been contracted.
Another project will be the construction of a new 125,000 bpd NGL fractionator in Mont Belvieu, Texas. Named the MB-4, it is fully contracted and will carry a cost of $575 million. It will be in operation by the first quarter of 2020.
The third major project will be the new 200-million cubic feet per day natural gas processing facility to be called the Demicks Lake plant in North Dakota’s Williston Basin. The project will cost $400 million and the company anticipates it will be fully operational in the fourth quarter of 2019 in McKenzie County, North Dakota.
ONEOK’s Williston Basin natural gas processing capacity will increase to more than 1.2 billion cubic feet per day following the completion of the Demicks Lake plant.
“The Arbuckle II Pipeline and MB-4 fractionator will help meet the needs of NGL producers in all of the basins where we operate, including the STACK and SCOOP areas and the Denver-Julesburg, Powder River, Williston and Permian basins,” said Spencer. “These strategic projects complement our recently announced Elk Creek pipeline, increasing ONEOK’s ability to deliver NGLs from the Rocky Mountain region to growing markets in the Gulf Coast.
“The Demicks Lake plant will provide critical natural gas processing capacity to accommodate increasing Williston Basin production, helping producers meet natural gas capture targets in North Dakota,” added Spencer.
He said the projects are expected to generate adjusted earnings by four to six times.
Maps of the projects can be viewed here.