Tulsa, Oklahoma-based ONEOK, Inc. released a statement on June 19 detailing its plans to expand its natural gas liquids (NGL) gathering system and its Sterling III Pipeline. The total project is expected to require an investment of $130 million and is expected to be completed by year-end 2018. The plans for expansion will be partly enabled by the assistance of a subsidiary of EnLink Midstream, which will be fulfilling a long-term contract to help accommodate the expected volume growth from both EnLink’s and other customers’ natural gas processing plants in the region.
The anticipated changes include expanding the capacity of the Sterling III Pipeline, which transports NGLs of varying quality to Mid-Continent infrastructure, from 190,000 bpd to 250,000 bpd, according to the release. There would also be an expansion of ONEOK’s Arbuckle Pipeline so that it will now connect to the EnLink Cajun-Sibon Pipeline in Southeastern Texas.
Furthermore, to enhance the firm’s ability to support the increasing natural gas activity within the STACK region, ONEOK will be entering into a long-term processing services agreement with a third party. This will enable the company to increase its access to natural gas processing capacity by 200 million cubic feet per day.
The expansions are mainly due to the higher volume of NGL production occurring within the STACK region, according to Terry K. Spencer, President and CEO of ONEOK. “Producers continue to accelerate their investments in the STACK due to the higher-return economics driven by strong crude oil and NGL-rich natural gas production rates,” he stated. “This expansion of our NGL gathering system further underscores our ability to meet the NGL service needs of STACK-area natural gas processors and demonstrates our continued commitment to providing reliable, high-quality service to our customers.”
ONEOK’s current NGLs segment gathers around 150,000 to 200,000 bpd of NGL from the region, with connections to over 100 third party operations. The firm’s vast third-party network in addition to the expected increase in volume of NGLs coming out of the STACK region couple to create a large benefit for ONEOK and the clients it serves. “This agreement provides an attractive option for timely access to existing natural gas processing capacity to better serve the rapid growth occurring on our dedicated acreage,” concluded Spencer.