Tuesday, April 9, 2013

Huge Story: ONEOK Announces Completion of Bakken Projects ... And Continued Expansion


May 23, 2013: ONEOK announces permit to build Garden Creek III

Original Post

This is the biggest story of the day, and there have been a number of big stories today. I've been following this story closely since I first spotted the Stateline I facility under construction in 2011.

ONEOK is reporting:
ONEOK Partners today announced the completion of three projects that are part of its previously announced $4.7 billion to $5.3 billion growth program through 2015, including:
  • the Bakken NGL pipeline that transports unfractionated natural gas liquids (NGLs) from the Bakken Shale and Three Forks formations in the Williston Basin to the partnership's 50 percent-owned Overland Pass Pipeline, a 760-mile NGL pipeline extending from southern Wyoming to Conway, KS
  • the Stateline II natural gas processing facility in western Williams County, N.D.; and,
  • an ethane header pipeline that creates a new point of interconnection between the partnership's Mont Belvieu, TX, NGL fractionation assets and several petrochemical customers.
Data points for the Bakken NGL pipeline:
  • $500 million
  • 600-mile pipeline
  • capacity to transport 60,000 bpd of unfractionated NGls from the Williston Basin to the Overland Pass Pipeline in northern Colorado
  • first NGL pipeline to transport natural gas from the Williston Basin to facilities in the Mid-Continent and the Texas Gulf Coast
  • further plans: another $100 million to install additional pump stations to increase capacity to 135,000 bpd from 60,000 bpd as noted in today's press release; this expansion will be completed in 3Q14
Data points for the Stateline II natural gas processing facility
  • completed
  • $150 million 
  • 100-million cubic feet per day (MMcf/d) natural gas processing facility
  • northwest of Williston, Williams County
  • this is the third new natural gas processing facility in the Williston Basin constructed by ONEOK Partners since late 2011; joins Garden Creek and Stateline I plants
  • this increases processing capacity to 390 from 90 MMcf/d in 2011
  • another $2 billion planned through 2015 for Garden Creek II and III plants in eastern McKenzie County, northeast of Watford City (I believe)
  • these new plants should be in service by 3Q14 and 1Q15 respectively
  • this will increase capacity from 390 now to 590 MM cf/d
From the linked press release:
ONEOK Partners is the largest independent operator of natural gas gathering and processing facilities in the Williston Basin, with a natural gas gathering system of more than 5,000 miles and acreage dedications of approximately 3.1 million acres.
To the best of my knowledge, no federal government stimulus money was used in these projects. Nor were any animals harmed. These guys did it on their own. And they did it in an "oily" field where folks said natural gas was uneconomical. And now with all the public pressure to minimize flaring, the timing could not be better. 

A lot of story lines here.

No matter how you slice and dice this one, this is a huge story. I'm glad to see this story come out the same day Debbie Downer posted a Bakken note over at SeekingAlpha suggesting "the Bakken will eventually fizzle." What the Debbie Downers talk about regarding the Bakken, I'm not seeing on the ground. Quite the opposite.

Good for ONEOK. I wish them the best. They've provided a lot of jobs for a lot of North Dakotans, and every activist environmentalist who has complained about flaring should send ONEOK a Christmas care. Like that will  happen.


Don notes that at 590 MMcf/d (as noted above), ONEOK will produce enough NGL BTUs in one day -- repeat, ONE DAY -- for all the energy needs of ONE typical house in North Dakota for 7,284 years. I did not check the math.

North Dakota is going to be quite a wet natural gas power house before this is all over. These five processing plants are located in one small geographic area. I can only assume there will be more, and I can only assume ONEOK is going to provide North Dakota jobs for quite some time. These are high-paying jobs.

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