The existing Bakken NGL and Overland Pass Pipelines are operating at full capacity. Additional NGL takeaway capacity is critical to meeting the needs of producers who are increasing production – Spencer
ONEOK, Inc. (ticker: OKE) plans to invest $1.4 billion for a new pipeline and related infrastructure to transport NGLs from the Rocky Mountain region to the company’s existing Mid-Continent NGL facilities.
The proposed Elk Creek Pipeline will be approximately 900-miles and 20-inches in diameter. The pipeline is expected to be completed by the end of 2019 and will have the capacity to transport up to 240,000 BPD of unfractionated NGLs from the company’s Riverview terminal in eastern Montana to Bushton, Kansas.
The proposed Elk Creek Pipeline is expected to cost approximately $1.2 billion, with related infrastructure costs expected to total approximately $200 million. The pipeline will have the capability to be expanded to 400,000 BPD with additional pump facilities.
“The existing Bakken NGL and Overland Pass Pipelines are 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,” said Terry K. Spencer, ONEOK president and CEO.
The planned Elk Creek Pipeline will be anchored by long-term contracts with terms ranging between 10 to 15 years, totaling approximately 100,000 BPD, which is supported primarily by minimum volume commitments, according to the company.
ONEOK expects to finance the new Elk Creek Pipeline with a combination of new equity, including approximately $450 million of net proceeds received from common stock issued during 2017 under its “at-the-market” equity program, with cash from operations in excess of dividends and short and long-term borrowings.
This project is part of ONEOK’s $3.0 billion – $3.5 billion of potential capital-growth projects.
