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Released February 28, 2019 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Midstream company ONEOK Incorporated (NYSE:OKE) (Tulsa, Oklahoma) is in the midst of a vast growth program, and spending for it is set to reach a peak this year. In the company's fourth-quarter 2018 earnings conference call, Chief Financial Officer Walt Hulse said, "Our capital spending is heavily weighted towards 2019, as the bulk of our largest projects are being placed in service this year and early in 2020. In 2019, we expect approximately $3.1 billion in growth capital expenditures." Projects include two natural gas liquids (NGL) pipelines, NGL fractionators and natural gas processing trains. "With these announced projects," said Hulse, "2020 capex is expected to be significantly less than 2019."
In the conference call, ONEOK Chief Operating Officer Kevin Burdick gave an update on these and other projects, starting with the necessity for the company's Demicks Lake natural gas processing trains in North Dakota's Williston Basin. Burdick said, "So far in 2019, our Williston Basin processing plants are operating close to full capacity and averaged more than 1 billion cubic feet per day during January. With more than 250 million cubic feet per day of natural gas currently being flared on our dedicated acreage in the Williston Basin, we expect our 200 million-cubic-feet-per day Demicks Lake I natural gas processing plant to open full in the fourth quarter of 2019 and provide approximately 25,000 barrels per day (BBL/d) of NGLs to the Elk Creek pipeline."
Construction of the grassroot Demicks Lake I NGL processing plant near Watford City, North Dakota, began late last year, with Optimized Process Designs LLC (Katy, Texas) providing engineering, procurement and construction (EPC). For more information, see Industrial Info's project report.
A further expansion of the Demicks Lake facility is already in the works. Burdick said, "Demicks Lake II, also a 200 million-cubic-feet-per-day plant, is expected to be complete in the first quarter of 2020 and will provide additional capacity for natural gas and NGL volumes to ramp through 2020." Construction of the facility is expected to begin this summer. The project has an estimated total investment value (TIV) of $140 million. For more information, see Industrial Info's project report.
ONEOK's 900-mile Elk Creek pipeline is under construction and will carry unfractionated NGLs from the company's terminal in eastern Montana to Kansas. Construction began earlier this year. Burdick said, "The southern portion of the Elk Creek pipeline from the Powder River Basin to the Mid-Continent remains on track to be complete as early as the third quarter 2019, with the entire Elk Creek pipeline expected to be fully in service in the fourth quarter of 2019. We have clear line of sight to Elk Creek reaching its initial contracted capacity of approximately 100,000 BBL/d in the first quarter of 2020." The pipeline has an estimated TIV of $1.4 billion. For more information, see Industrial Info's project reports on the Montana, Wyoming, Colorado and Kansas portions of the pipeline.
Construction of the company's $1.36 billion Arbuckle II NGL pipeline began late last year. The pipeline will carry NGLs from ONEOK's gathering systems in Oklahoma to its storage and fractionation facilities in Mont Belvieu, Texas. Burdick said, "Arbuckle II is under construction and on schedule for an expected completion in the first quarter of 2020. Initial capacity on Arbuckle II is 400,000 BBL/d. That will be expanded to 500,000 BBL/d in the first quarter of 2021." For more information, see Industrial Info's project reports on the Oklahoma and Texas portions of the pipeline.
To accommodate the additional NGL volumes at Mont Belvieu, ONEOK is underway on two new fractionators at its facility there, MB-4 and MB-5. Burdick said, "Our Mont Belvieu fractionators continue to operate highly utilized, and we remain on schedule to complete our 125,000-BBL/d MB-4 fractionator in the first quarter of 2020. We expect MB-4 to exit 2020 full and for MB-5, which is also 125,000 BBL/d, to ramp up quickly once it's completed in the first quarter of 2021." The projects have a combined total investment value of more than $1.3 billion. Burns & McDonnell Incorporated (Kansas City, Missouri) is providing EPC services on MB-4. MB-5 will bring the site's total fractionation capacity to 400,000 BBL/d. For more information, see Industrial Info's project reports on MB-4 and MB-5.
Burdick said ONEOK is utilizing 90% of its 800,000-BBL/d system-wide NGL fractionation capacity.
ONEOK reported full-year 2018 net income of $1.15 billion, compared with $387.8 billion in 2017.
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, 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.
In the conference call, ONEOK Chief Operating Officer Kevin Burdick gave an update on these and other projects, starting with the necessity for the company's Demicks Lake natural gas processing trains in North Dakota's Williston Basin. Burdick said, "So far in 2019, our Williston Basin processing plants are operating close to full capacity and averaged more than 1 billion cubic feet per day during January. With more than 250 million cubic feet per day of natural gas currently being flared on our dedicated acreage in the Williston Basin, we expect our 200 million-cubic-feet-per day Demicks Lake I natural gas processing plant to open full in the fourth quarter of 2019 and provide approximately 25,000 barrels per day (BBL/d) of NGLs to the Elk Creek pipeline."
Construction of the grassroot Demicks Lake I NGL processing plant near Watford City, North Dakota, began late last year, with Optimized Process Designs LLC (Katy, Texas) providing engineering, procurement and construction (EPC). For more information, see Industrial Info's project report.
A further expansion of the Demicks Lake facility is already in the works. Burdick said, "Demicks Lake II, also a 200 million-cubic-feet-per-day plant, is expected to be complete in the first quarter of 2020 and will provide additional capacity for natural gas and NGL volumes to ramp through 2020." Construction of the facility is expected to begin this summer. The project has an estimated total investment value (TIV) of $140 million. For more information, see Industrial Info's project report.
ONEOK's 900-mile Elk Creek pipeline is under construction and will carry unfractionated NGLs from the company's terminal in eastern Montana to Kansas. Construction began earlier this year. Burdick said, "The southern portion of the Elk Creek pipeline from the Powder River Basin to the Mid-Continent remains on track to be complete as early as the third quarter 2019, with the entire Elk Creek pipeline expected to be fully in service in the fourth quarter of 2019. We have clear line of sight to Elk Creek reaching its initial contracted capacity of approximately 100,000 BBL/d in the first quarter of 2020." The pipeline has an estimated TIV of $1.4 billion. For more information, see Industrial Info's project reports on the Montana, Wyoming, Colorado and Kansas portions of the pipeline.
Construction of the company's $1.36 billion Arbuckle II NGL pipeline began late last year. The pipeline will carry NGLs from ONEOK's gathering systems in Oklahoma to its storage and fractionation facilities in Mont Belvieu, Texas. Burdick said, "Arbuckle II is under construction and on schedule for an expected completion in the first quarter of 2020. Initial capacity on Arbuckle II is 400,000 BBL/d. That will be expanded to 500,000 BBL/d in the first quarter of 2021." For more information, see Industrial Info's project reports on the Oklahoma and Texas portions of the pipeline.
To accommodate the additional NGL volumes at Mont Belvieu, ONEOK is underway on two new fractionators at its facility there, MB-4 and MB-5. Burdick said, "Our Mont Belvieu fractionators continue to operate highly utilized, and we remain on schedule to complete our 125,000-BBL/d MB-4 fractionator in the first quarter of 2020. We expect MB-4 to exit 2020 full and for MB-5, which is also 125,000 BBL/d, to ramp up quickly once it's completed in the first quarter of 2021." The projects have a combined total investment value of more than $1.3 billion. Burns & McDonnell Incorporated (Kansas City, Missouri) is providing EPC services on MB-4. MB-5 will bring the site's total fractionation capacity to 400,000 BBL/d. For more information, see Industrial Info's project reports on MB-4 and MB-5.
Burdick said ONEOK is utilizing 90% of its 800,000-BBL/d system-wide NGL fractionation capacity.
ONEOK reported full-year 2018 net income of $1.15 billion, compared with $387.8 billion in 2017.
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, 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.
