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ONEOK announces additional pipeline capacity

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World Pipelines,

ONEOK Inc. has announced plans to construct additional natural gas liquids (NGL) and natural gas infrastructure.

The additions include: a 125 000 bpd MB-5 NGL fractionator in Mont Belvieu, Texas, US, and related infrastructure; a 200 million ft3/d natural gas processing facility – the Demicks Lake II plant and related infrastructure – in the Williston Basin, US; an extension of ONEOK's Arbuckle II NGL pipeline further north and additional NGL gathering infrastructure to increase capacity between the mid-continent market hub and Arbuckle II; and an expansion of the same pipeline by approximately 100 000 bpd to increase total capacity up to 500 000 bpd by adding pump stations.

These projects are expected to generate adjusted earnings before interest, taxes, depreciation and amortisation (adjusted EBITDA) multiples of four to six times. ONEOK still does not expect any equity issuances in 2018 or well into 2019.

The new MB-5 fractionator and related infrastructure project, which includes system expansions for future additional fractionation, storage and export capabilities in Mont Belvieu, is expected to cost approximately US$750 million. MB-5 is fully contracted and will increase ONEOK's total NGL fractionation capacity to more than 1 million bpd.

The Arbuckle II extension project will provide additional takeaway capacity, and additional NGL gathering infrastructure will allow increasing volumes on the Elk Creek Pipeline access to fractionation capacity at Mont Belvieu. The project is expected to cost approximately US$240 million.

The 100 000 bpd expansion of Arbuckle II with additional pump facilities is expected to cost US$60 million. Arbuckle II is currently under construction, with the initial 400 000 bpd of capacity expected to be complete in 1Q20. Contracted capacity on Arbuckle II is now more than 300 000 bpd.

All of the above NGL projects are expected to be completed in 1Q21.

The Demicks Lake II natural gas processing plant and related infrastructure in McKenzie County, North Dakota, US, are expected to cost a total of approximately US$410 million and be completed in 1Q20. The plant is supported by acreage dedications with primarily fee-based contracts.

The Demicks Lake I and II plants are expected to contribute additional NGL volumes to ONEOK's NGL gathering system and natural gas volumes to ONEOK's 50% Northern Border Pipeline.

Following the project's completion, ONEOK's Williston Basin natural gas processing capacity will increase to more than 1.4 billion ft3/d.

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