TULSA — ONEOK Inc. said Monday it will expand energy infrastructure in Oklahoma’s STACK play to serve growth from EnLink Midstream Partners LP and other companies.
ONEOK said it would expand its Mid-Continent natural gas liquids gathering system and its existing Sterling III pipeline to accommodate growth from natural gas processing plants in the STACK, which is west and northwest of Oklahoma City. The $130 million project is expected to be complete by the end of 2018.
“Producers continue to accelerate their investments in the STACK due to higher-return economics driven by strong crude oil and NGL (natural-gas liquids)-rich natural gas production rates,” said Terry Spencer, ONEOK’s president, and CEO, in a news release.
The STACK, which stands for Sooner Trend, Anadarko (Basin), Canadian (and) Kingfisher (counties), is one of the most active drilling areas in the country.
In the expansion, the capacity of the Sterling III pipeline will rise to 250,000 barrels per day, up from 190,000 barrels per day. The Sterling III pipeline transports natural-gas liquid products between ONEOK’s Mid-Continent infrastructure and similar facilities on the Gulf Coast in Mont Belvieu, Texas.
The project also will connect ONEOK’s Arbuckle pipeline to EnLink’s Cajun-Sibon pipeline in southeast Texas. A unit of EnLink entered into a long-term, fee-based agreement with a unit of ONEOK to move natural gas liquids from Oklahoma to the Mont Belvieu trading and storage hub.
“This arrangement provides a solution to move NGLs from EnLink’s premier position in prolific central Oklahoma to our demand-driven Louisiana system and other Gulf Coast demand centers, through a long-term attractive agreement with ONEOK,” said Barry Davis, EnLink’s chairman, and CEO. “The agreement gives us physical connections from Chisholm directly to Cajun-Sibon via the ONEOK systems, which will enhance the performance and reliability of our platform.
“We evaluated many options to move NGLs to the Gulf Coast, including building our own pipeline, and this deal was the most economic, secure and flexible for EnLink and our customers.”
In addition, ONEOK said it has entered into a long-term processing services agreement with an unnamed third party to gain access to an additional 200 million cubic feet per day of natural gas processing capacity in the STACK and the SCOOP plays in Oklahoma.
“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,” Spencer said.
ONEOK said it will spend $40 million to build a 30-mile natural gas gathering pipeline through the core of the STACK play in Blaine County. The pipeline, expected to be completed by the end of the year, will connect ONEOK’s natural gas gathering system to the third party’s existing natural gas processing facility in northern Oklahoma.
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About Oklahoma Minerals Founder GIB KNIGHT
Gib Knight is a private oil and gas investor and consultant, providing clients advanced analytics and building innovative visual business intelligence solutions to visualize the results, across a broad spectrum of regulatory filings and production data in Oklahoma and Texas. He is the founder of OklahomaMinerals.com, an online resource designed for mineral owners in Oklahoma.