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Released January 10, 2018 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--U.S. midstream-services provider ONEOK Incorporated (NYSE:OKE) (Tulsa, Oklahoma) plans to construct a pipeline and associated infrastructure to ship natural gas liquids (NGLs) from the Rocky Mountain region to its existing Mid-Continent NGL facilities. Industrial Info is currently tracking $310 million in active ONEOK projects in Oklahoma and Texas.
The Elk Creek pipeline will span 900 miles (1,400 kilometers) and transport 240,000 barrels per day (BBL/d) of unfractionated NGLs from ONEOK's Riverview, Montana, rail terminal to its Bushton, Kansas, fractionation complex. The pipeline is expected to cost $1.2 billion, and related infrastructure is seen costing another $200 million. With additional pump facilities, the NGL pipeline could be expanded to 400,000 BBL/d.
"With Bakken NGL and Overland Pass pipelines 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," ONEOK Chief Executive Terry Spencer said.
Click on the image at right for a map of the proposed Elk Creek natural gas liquids pipeline.
The Elk Creek pipeline -- part of ONEOK's previously announced, broader effort to invest $3 billion to $3.5 billion in capital-growth projects -- already is anchored by a long-term contract of 10-15 years totaling 100,000 BBL/d and is scheduled to enter service by the end of 2019. NGLs like ethane and propane are used as feedstock for the U.S. petrochemical industry.
"The Elk Creek Pipeline will strengthen ONEOK's position in the high-production areas of the Bakken, Denver-Julesburg and Powder River regions and also provide additional reliability and redundancy on our NGL system," Spencer added.
Other top ONEOK projects being tracked by Industrial Info include a $200 million expansion of the company's NGLs system into the Delaware basin, part of the larger Permian basin in West Texas. West Texas LPG Pipeline Limited Partnership, a joint venture of ONEOK and Martin Midstream Partners Limited Partnership (NASDAQ:MMLP) (Houston, Texas), plans to build a 120-mile, 16-inch pipeline lateral with an initial capacity of 110,000 BBL/d, as well as two pump stations and pipeline looping along the existing West Texas LPG system to increase its capacity to handle the dedicated volume. See Industrial Info's project reports on the pipeline extension and pump stations for more information.
Click on the image at right for ONEOK's West Texas LPG extension.
The project, which is expected to be completed in third-quarter 2018, is supported by long-term, dedicated NGL production from two planned third-party natural gas processing plants in northern Reeves County, Texas, which the partnership estimates will produce up to 40,000 BBL/d. The West Texas LPG Pipeline system traverses 2,600 miles from the Permian basin in southeastern and West Texas to the NGL storage and fractionation hub in Mont Belvieu, Texas. The pipeline is owned 80% by ONEOK and 20% by Martin Midstream.
The widely held expectation that Permian NGL production will rise sharply through the early 2020s has set off fierce competition among midstream companies to develop new pipeline capacity out of the play -- primarily to Mont Belvieu, but also to Corpus Christi, Texas. Between 2006 and 2016, ONEOK completed $9 billion in acquisitions and capital-growth projects.
Click on the image at right for details on ONEOK's growth projects and acquisitions from 2006-2016.
Industrial Info also is tracking a $155 million planned expansion at ONEOK's Canadian Valley cryogenic natural gas plant in Calumet, Oklahoma, to increase the facility's processing capacity from 200 million standard cubic feet per day (MM SCFD) to 400 MM SCFD. See Industrial Info's project report for more information.
U.S. midstream firms operating in the Bakken, Marcellus and other shale plays are expected see a sizeable increase in crude oil and natural gas production in 2018, according to a recent report by energy assets research firm, East Daley Capital Advisors Incorporated (EDC) (Centennial, Colorado).
The guidance outlook identifies several key factors that are expected to provide a much-needed boost to the U.S. oil and gas midstream sector.
"The most influential midstream theme in 2018 is our forecast for significant oil and gas production growth," noted Justin Carlson, EDC vice president, managing director of research and report author. "The main lag with production in 2017 was due to the long lead time that contracting frack (hydraulic fracturing) crews needed to complete the newly-drilled wells. We do not anticipate that being an issue this year, as field service providers are really ramping up their frack fleets. Completions will increase significantly in 2018."
According to the EDC's Carlson, current prices, guidance from producers and service companies and a stable forward curve point to a significant production increase in North Dakota's Bakken formation. Drilling activity and well completions in the Bakken rose steadily throughout 2017 as crude prices stabilized. Those trends are expected to continue in 2018, positively impacting midstream companies -- in addition to ONEOK -- such as Enbridge Incorporated (NYSE:ENB) (Calgary, Alberta); Kinder Morgan Incorporated (NYSE:KMI) (Houston, Texas); Tallgrass Energy Partners Limited Partnership (NYSE:TEP) (Leawood, Kansas); and Targa Resources Corporation (NYSE:TRGP) (Houston, Texas).
For midstream firms exposed primarily to natural gas, the Marcellus will continue to be the best location, according to the outlook.
"Production in the Northeast is poised to ramp up significantly in 2018 as new pipeline projects debottleneck the region," Carlson observed. "Given our optimistic forecast for Northeast gas production, midstream companies levered to the area such as Antero Midstream Partners Corporation (NYSE:AM) (Denver, Colorado); Energy Transfer Partners Company (NYSE:ETP) (Philadelphia, Pennsylvania); EQT Midstream Partners Limited Partnership (NYSE:EQM) (Pittsburgh, Pennsylvania); MPLX Corporation (NYSE:MPLX) (Findlay, Ohio); Rice Midstream Partners Limited Partnership (NYSE:RMP) (Pittsburgh, Pennsylvania); and Williams Pipeline Partners Limited Partnership (NYSE:WPZ) (Tulsa, Oklahoma) should continue to benefit."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle TM, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com
"With Bakken NGL and Overland Pass pipelines 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," ONEOK Chief Executive Terry Spencer said.
The Elk Creek pipeline -- part of ONEOK's previously announced, broader effort to invest $3 billion to $3.5 billion in capital-growth projects -- already is anchored by a long-term contract of 10-15 years totaling 100,000 BBL/d and is scheduled to enter service by the end of 2019. NGLs like ethane and propane are used as feedstock for the U.S. petrochemical industry.
"The Elk Creek Pipeline will strengthen ONEOK's position in the high-production areas of the Bakken, Denver-Julesburg and Powder River regions and also provide additional reliability and redundancy on our NGL system," Spencer added.
Other top ONEOK projects being tracked by Industrial Info include a $200 million expansion of the company's NGLs system into the Delaware basin, part of the larger Permian basin in West Texas. West Texas LPG Pipeline Limited Partnership, a joint venture of ONEOK and Martin Midstream Partners Limited Partnership (NASDAQ:MMLP) (Houston, Texas), plans to build a 120-mile, 16-inch pipeline lateral with an initial capacity of 110,000 BBL/d, as well as two pump stations and pipeline looping along the existing West Texas LPG system to increase its capacity to handle the dedicated volume. See Industrial Info's project reports on the pipeline extension and pump stations for more information.
The project, which is expected to be completed in third-quarter 2018, is supported by long-term, dedicated NGL production from two planned third-party natural gas processing plants in northern Reeves County, Texas, which the partnership estimates will produce up to 40,000 BBL/d. The West Texas LPG Pipeline system traverses 2,600 miles from the Permian basin in southeastern and West Texas to the NGL storage and fractionation hub in Mont Belvieu, Texas. The pipeline is owned 80% by ONEOK and 20% by Martin Midstream.
The widely held expectation that Permian NGL production will rise sharply through the early 2020s has set off fierce competition among midstream companies to develop new pipeline capacity out of the play -- primarily to Mont Belvieu, but also to Corpus Christi, Texas. Between 2006 and 2016, ONEOK completed $9 billion in acquisitions and capital-growth projects.
Click on the image at right for details on ONEOK's growth projects and acquisitions from 2006-2016.Industrial Info also is tracking a $155 million planned expansion at ONEOK's Canadian Valley cryogenic natural gas plant in Calumet, Oklahoma, to increase the facility's processing capacity from 200 million standard cubic feet per day (MM SCFD) to 400 MM SCFD. See Industrial Info's project report for more information.
U.S. midstream firms operating in the Bakken, Marcellus and other shale plays are expected see a sizeable increase in crude oil and natural gas production in 2018, according to a recent report by energy assets research firm, East Daley Capital Advisors Incorporated (EDC) (Centennial, Colorado).
The guidance outlook identifies several key factors that are expected to provide a much-needed boost to the U.S. oil and gas midstream sector.
"The most influential midstream theme in 2018 is our forecast for significant oil and gas production growth," noted Justin Carlson, EDC vice president, managing director of research and report author. "The main lag with production in 2017 was due to the long lead time that contracting frack (hydraulic fracturing) crews needed to complete the newly-drilled wells. We do not anticipate that being an issue this year, as field service providers are really ramping up their frack fleets. Completions will increase significantly in 2018."
According to the EDC's Carlson, current prices, guidance from producers and service companies and a stable forward curve point to a significant production increase in North Dakota's Bakken formation. Drilling activity and well completions in the Bakken rose steadily throughout 2017 as crude prices stabilized. Those trends are expected to continue in 2018, positively impacting midstream companies -- in addition to ONEOK -- such as Enbridge Incorporated (NYSE:ENB) (Calgary, Alberta); Kinder Morgan Incorporated (NYSE:KMI) (Houston, Texas); Tallgrass Energy Partners Limited Partnership (NYSE:TEP) (Leawood, Kansas); and Targa Resources Corporation (NYSE:TRGP) (Houston, Texas).
For midstream firms exposed primarily to natural gas, the Marcellus will continue to be the best location, according to the outlook.
"Production in the Northeast is poised to ramp up significantly in 2018 as new pipeline projects debottleneck the region," Carlson observed. "Given our optimistic forecast for Northeast gas production, midstream companies levered to the area such as Antero Midstream Partners Corporation (NYSE:AM) (Denver, Colorado); Energy Transfer Partners Company (NYSE:ETP) (Philadelphia, Pennsylvania); EQT Midstream Partners Limited Partnership (NYSE:EQM) (Pittsburgh, Pennsylvania); MPLX Corporation (NYSE:MPLX) (Findlay, Ohio); Rice Midstream Partners Limited Partnership (NYSE:RMP) (Pittsburgh, Pennsylvania); and Williams Pipeline Partners Limited Partnership (NYSE:WPZ) (Tulsa, Oklahoma) should continue to benefit."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle TM, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com
