ONEOK to buy pipelines worth US$ 800 million

ONEOK Partners LP agreed yesterday to buy two natural gas liquids pipeline systems in Texas and New Mexico from affiliates of Chevron Corp. for US$ 800 million.

The deal includes an 80% stake in the West Texas LPG Pipeline Limited Partnership and 100%of the Mesquite Pipeline.

Together, the pipeline systems include 2600 miles of natural gas liquid gathering pipelines that collect from the Permian Basin in West Texas and Southwestern New Mexico and the Barnett Shale in North Texas and deliver to ONEOK Partners’ existing hub in Mont Belvieu, Texas.

“This strategic acquisition immediately establishes ONEOK as a significant NGL service provider in the Permian Basin,” ONEOK Partners CEO Terry K. Spencer said in a statement. “We are adding another rapidly growing producing region to our operating footprint, which will create integration and expansion opportunities for the partnership by connecting these assets to our existing NGL fractionation and storage facilities in Mont Belvieu.”

The purchase is expected to boost ONEOK Partners’ NGL gathering system more than 60% to almost 6900 miles of pipeline. Volumes are expected to jump 40% to about 800 000 bpd systemwide.

"With this acquisition, along with other announced capital-growth projects in North Dakota, Oklahoma and Wyoming, the partnership's total investment has increased by more than US$ 3 billion in the last year," said Spencer.

"These assets will provide fee-based earnings to the partnership and further expand our natural gas liquids segment's portfolio of assets while positioning us for additional growth opportunities," Spencer added.

Edited from various sources by Elizabeth Corner

Sources: News OK, Nasdaq

Read the article online at: https://www.worldpipelines.com/business-news/28102014/oneok-to-buy-pipelines-worth-us-800-million/