ONEOK Set to Add Permian, Bakken Pipeline Capacity in 2024

Researched by Industrial Info Resources (Sugar Land, Texas)--ONEOK Incorporated (NYSE:OKE) (Tulsa, Oklahoma) reported record volumes and strong financials for 2023, which the company says points to further growth this year. ONEOK enjoyed double-digit volume growth for natural gas and natural gas liquid (NGL) processing when compared with 2022, and it saw fee-based earnings growth in each of its major businesses. This year, the company aims to improve its production efficiency to provide stronger natural gas and NGL volumes across its systems. Industrial Info is tracking nearly $3 billion worth of active and planned projects from ONEOK, nearly 60% of which is attributed to pipeline projects.

Click on the image at right for a graph detailing ONEOK's active and planned projects, by industry sector.

Texas alone accounts for more than 75% of the capital spending related to ONEOK's projects, including the ongoing construction of the MB-6 Fractionator at its complex in Mont Belvieu. The 125,000-barrel-per-day (BBL/d) unit is designed to extract NGLs from the Granite Wash, Cana-Woodford and the Eagle Ford shale plays to produce purity ethane. It will bring the Mont Belvieu complex's total site capacity to 525,000 BBL/d of ethane, propane, isobutane, normal butane and natural gasoline. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Project and Plant databases can learn more from a detailed project report and plant profile.

"As it relates to capital expenditures [in 2024], we've assumed a total of $1.85 billion, which includes growth and maintenance capital," said Walt Hulse, the chief financial officer of ONEOK, in a quarterly earnings-related conference call. "This guidance reflects the investment necessary to keep up with the expected levels of producer activity and attractive return growth projects, including the MB-6 Fractionator and expansions of our West Texas NGL and Elk Creek [in North Dakota] NGL pipelines, all expected to be completed in the first quarter of 2025. Once these projects are completed in early 2025, we expect to be on a trend of decreasing capital expenditures over the near to medium-term."

Hulse added that ONEOK's expected 2024 capital guidance does not include projects that have not yet reached a final investment decision, such as the Saguaro Connector project, which is designed to export natural gas from the Permian Basin to Mexico via the U.S.-Mexico border in Far Western Texas. The 155-mile natural gas pipeline is designed to carry 2.8 billion cubic feet per day out of the Waha Hub in Pecos County to planned border-crossing facilities in Hudspeth County. It would be serviced by compressor stations in Coyanosa and near Van Horn. Subscribers can read detailed project reports on the pipeline, Coyanosa station and Van Horn station.

In addition to the buildout of its LNG capacity in West Texas, ONEOK is pursuing a proposed expansion of its West Texas LPG Pipeline, which would add 325 miles of line to transport up to 240,000 BBL/d (expandable to 400,000 BBL/d) of unfractionated liquefied petroleum gas (LPG) from Midland County to Mont Belvieu. It would be supported by a pump station near Goldsmith, Texas. Subscribers can read detailed reports on the proposed pipeline and pump station.

Sheridan Swords, ONEOK's Executive Vice President for Commercial Liquids and Natural Gas Gathering and Processing, was upbeat about the company's North Dakota operations in the conference call: "We expect volume growth in the Rocky Mountain and Mid-Continent regions [this year], driven by higher-than-anticipated well connections in 2023 and consistent producer activity levels expected in 2024. In the Rocky Mountain region, we expect processing volumes to grow 9% at the midpoint compared with 2023 and an average more than 1.6 Bcf per day in 2024."

He added: "Strong producer activity levels in 2023 and the continued trend of high gas-to-oil ratios drove several months of record North Dakota natural gas production, with the latest record of 3.52 billion cubic feet per day set in December. Producer activity has carried over into 2024." Among the projects nearing construction in response to this growth is ONEOK's expansion of the Bear Creek Pipeline in North Dakota's Bakken Shale, which includes the construction of two pump stations near Watford City and Kildeer. The added capacity will allow the company to transport up to 80,000 BBL/d of NGL into its Bakken and Elk Creek pipeline system. Subscribers can read detailed reports on the Watford City and Kildeer projects.

Among the facilities serviced by the Elk Creek Pipeline is ONEOK's NGL fractionation complex in Bushton, Kansas, which is seeking permits for a proposed expansion of its East Integrated Fractionator. The project would allow ONEOK to fractionate another 50,000 BBL/d of NGLs provided by the Elk Creek and Arbuckle II systems, bringing Bushton's total fractionation capacity to between 290,000 and 305,000 BBL/d. Subscribers can learn more from a detailed project report.

Subscribers to Industrial Info's GMI Project and Plant databases can click here for a full list of detailed reports for projects mentioned in this article, and click here for a full list of related plant profiles.

Subscribers can click here for a full list of reports for active and planned projects from ONEOK.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).