ONEOK Boosts Fractionation Capacity to Over 1MM BPD

ONEOK, Inc. has completed MB-6, a 125,000-barrel per day (bpd) natural gas liquids (NGL) fractionator in Mont Belvieu, Texas, and the full looping of the West Texas NGL Pipeline system.

The Tulsa, Oklahoma-based company said in a news release that the completion of MB-6 increases the company's fractionation capacity to more than one million bpd, “reducing the need for third-party fractionation and enhancing ONEOK's ability to serve growing NGL market demand”.

The completion of the full looping of the West Texas NGL Pipeline system expands its capacity to 515,000 bpd. Additional pump stations, which are expected to be completed in mid-2025, will further increase system capacity to 740,000 bpd, ONEOK noted.

"The completion of these important NGL projects demonstrates our dedication to meeting the needs of our customers by providing reliable midstream solutions," ONEOK President and CEO Pierce Norton II said. "These strategic expansions provide critical NGL transportation and fractionation capacity, supporting NGL growth across our integrated operations”.

In June, ONEOK completed its acquisition of a system of natural gas liquids (NGL) pipelines from Easton Energy for approximately $280 million.

The transaction included approximately 450 miles of liquids products pipelines located in the strategic Gulf Coast market centers for NGLs, refined products and crude oil. ONEOK said it plans to connect the pipelines to its Mont Belvieu, Texas, NGL infrastructure and ONEOK's Houston refined products and crude oil infrastructure.

"The closing of this strategic acquisition provides immediate earnings, expands our natural gas liquids asset portfolio and accelerates ONEOK's ability to capture commercial synergies related to our recent acquisition of Magellan," Norton said. "These new assets offer significant connectivity between critical Gulf Coast supply and demand centers”.

Recently, ONEOK announced it planned to purchase the remaining issued share capital of EnLink Midstream LLC, which it recently took over from Global Infrastructure Partners (GIP). A month earlier, it had closed the acquisition is for 43 percent of Enlink’s outstanding common units for $14.90 per unit and 100 percent of the interests in the managing member for $300 million, for total cash consideration of approximately $3.3 billion.

Expected to conclude in the first quarter of 2025, the transaction is subject to customary closing conditions including approval by a majority of holders of outstanding EnLink common shares, ONEOK said.

Last month, ONEOK also agreed to sell three natural gas pipelines with an aggregate capacity of 3.7 billion cubic feet a day (Bcfd) to DT Midstream Inc. for $1.2 billion, according to an earlier joint statement.

The transaction involves 1,300 miles of pipelines straddling seven states “in the attractive Midwest market region which is expected to experience continued growth in power demand”, DT Midstream said in a statement. The transaction is expected to close by the end of 2024 or early 2025.

ONEOK describes itself as a leading midstream operator that provides gathering, processing, fractionation, transportation and storage services. Through its pipeline network, the company transports natural gas, natural gas liquids (NGLs), refined products and crude oil.

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