Oneok to build NGL pipeline, fractionator

May 3, 2011
Oneok Partners LP, Tulsa, will invest between $910 million and $1.2 billion to build out its NGL infrastructure along the Texas Gulf Coast.

By OGJ editors
HOUSTON, May 3
-- Oneok Partners LP, Tulsa, will invest between $910 million and $1.2 billion to build out its NGL infrastructure along the Texas Gulf Coast.

Between now and late 2013, the company will:

• Build a 570-mile, 16-in. OD NGL pipeline—the Sterling III Pipeline—to move unfractionated NGLs or NGL purity products from the US Midcontinent to the Gulf Coast.

• Reconfigure its existing Sterling I and II NGL distribution pipelines.

• Build a 75,000 b/d NGL fractionator, calling it MB-2, at Mont Belvieu, Tex.

Oneok Partners Chief Executive Officer Terry K. Spencer said the projects are to accommodate growing NGL production in the Midcontinent and elsewhere and help “alleviate the infrastructure constraints” between Midcontinent and Gulf Coast markets.

The Sterling III pipeline will cost $610-810 million and have an initial capacity of 193,000 b/d from the partnership's NGL infrastructure at Medford, Okla., to storage and fractionation at Mont Belvieu. Once completed, it will double the partnership's current pipeline capacity between Medford and Mont Belvieu, said the company announcement.

The investment also includes reconfiguring the existing Sterling I and II pipelines, which currently distribute NGL purity products between the Midcontinent and Gulf Coast NGL markets, to transport unfractionated NGLs or NGL purity products.

Construction will begin in early 2013, following receipt of necessary permits and the acquisition of right of way. The partnership anticipates using a portion of the existing right of way on the Sterling I and II pipelines. Completion is scheduled for late 2013.

With additional pump stations, Sterling III Pipeline's capacity can be expanded to 250,000 b/d, said the company. It will cross the Woodford shale as well as provide transportation capacity for NGL production from the growing Cana-Woodford shale and Granite Wash, where it can gather unfractionated NGLs from new natural gas processing plants that are being built in response to increased drilling in these areas.

The new MB-2 fractionator will cost $300 to $390 million to build and will supplement the partnership's 80%-owned, 160,000-b/d MB-1 fractionator in Mont Belvieu. Its initial 75,000-b/d capacity can be expanded to 125,000 b/d to accommodate additional NGLs as they are added to the currently expanding Arbuckle Pipeline and the new Sterling III Pipeline and the Sterling I and II reconfiguration, said the announcement.

In December 2010, the partnership announced plans to install additional pump stations on the Arbuckle Pipeline to increase its capacity to 240,000 b/d from 180,000 b/d by first-half 2012. Arbuckle is a 440-mile NGL pipeline from southern Oklahoma through the Barnett shale to the partnership's fractionation and storage at Mont Belvieu.