ONEOK: Another Natural Gas Facility (Demicks Lake); Will Expand Two Other Plants; Ahead Of Schedule On Garden Creek III; And May Announce More Projects By End Of 2014

Updates

November 15, 2021: ONEOK to complete previously announced Demicks Lake III. 

February 20, 2018: ONEOK recently asked to expand its Bear Creek facility from 80 million cf/d to 175 million cf/d. 

August 12, 2015: small ONEOK pipeline approved. 

February 25, 2015: ONEOK will temporarily halt work on three natural gas processing plants in the mid-continent due to the slump in oil and gas prices; of the three, only the recently announced Demicks Lake plant in McKenzie County.

October 6, 2014: Targa announces a new 200 mmcfpd natural gas processing plant in McKenzie County. 
 
September 2, 2014: ONEOK may increase capacity at Garden Creek II.  

Original Post

This is a huge story. If you don't read anything else at the blog today, be sure to read this one.

Note: there is a lot of information in this post. I recommend the reader go to the linked ONEOK press release for details (and to make sure I did not make mistakes in summary below).

This is the list of ONEOK natural gas plants in my database for North Dakota:

• Lignite, Burke County, 6 million cubic feet/day
• Marmath, Slope County, 7.5 MMcf/d
• Grasslands, Williams, 100 MMcf/d
• Stateline I, Williams, 100 MMcf/d
• Stateline II, Williams, 100 MMcf/d
• Garden Creek I, McKenzie, 100 MMcf/d
• Garden Creek II, McKenzie, 100 MMcf/d; completed; announced August 26, 2014;
• Garden Creek III, McKenzie, 120 MMcf/d -- to be completed in 2015* (ahead of schedule)
• Lonesome Creek, McKenzie, 200 MMcf/d -- announced July 14, 2014; to be completed in 2015
• Demicks Lake, McKenzie, 200 MMcf/d -- announced July 30, 2014; to be completed in 2016; in this press release Oneok said more projects might be announced before the end of 2014; appears to have been revised upward to 400 MMcf/d in an article dated December 18, 2014.
• Bear Creek, northwest Dunn County, 80 MMcf/d -- announced Sept 22, 2014; $300 million; to be completed 2Q16; asked in late 2017/early 2018 to expand this plant from 80 million cf/d to 175 million cf/d;

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On July 14, 2014, The Bismarck Tribune ran the story announcing the Lonesome Creek facility had been approved by the PSC, with 200 MCF capacity, at a cost of $280 million. The article said this would be ONEOK's 6th plant since 2007 and its 7th plant in the state. (If one doesn't count the very small plants at Lignite and Marmath, the numbers "add up.")

Today, ONEOK announces yet another facility: the Demicks Lake facility. Data points:

• Demicks Lake facility, $605 - $785 million, 200-million cubic per day facility
• Demicks Lake facility, northeast McKenzie County; to be completed in 2016
• brings ONEOK's CAPEX to more than $7.0 billion through 2016 in state of North Dakota
• Williston Basin natural gas processing capacity to reach 1.1 billion cubic feet/day with new plant
• *Garden Creek III plant ahead of schedule; to be completed in 4Q14

This announcement: $605 to $785 million between now and end of 3Q16:

• Build a new 200-million cubic feet per day (MMcf/d) natural gas processing facility – the Demicks Lake plant – and related infrastructure in northeast McKenzie County, North Dakota,
• Construct additional natural gas compression at the partnership's existing and planned Garden Creek and Stateline natural gas processing plants in the Williston Basin by a total of 100 MMcf/d; and
• Build approximately 12 miles of natural gas liquids (NGL) gathering pipeline from the Demicks Lake plant to the partnership's existing Bakken NGL pipeline.

ONEOK spokesman:  "The additional 300 MMcf/d in the Williston Basin will increase our natural gas processing capacity to approximately 1.1 billion cubic feet per day (Bcf/d) in the region. Pending board approval, we expect to announce additional Williston Basin natural gas processing capacity by the end of this year."

In addition, the Garden Creek III natural gas processing plant, originally scheduled for completion in the first quarter 2015, is now ahead of schedule and slated for completion in the fourth quarter 2014.

"The completion of this plant, now a 120-MMcf/d natural gas processing facility with the additional capital investment in compression, combined with other ongoing investments in the Williston Basin, will provide the partnership with additional natural gas and NGL volumes while also creating long-term value for our unitholders," said Spencer.

For comparison, with its recent expansion, the Hess plant at Tioga has a capacity of 250 MCF.