ONEOK Announces West Texas LPG System Expansion into the Delaware Basin

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ONEOK Inc. announced that the West Texas LPG Pipeline Limited Partnership, a joint venture between ONEOK, which is the operator and owns 80 percent, and Martin Midstream Partners LP, which owns 20 percent, plans to invest approximately $200 million to expand its natural gas liquids (NGL) system into the prolific Delaware Basin, part of the larger Permian Basin.

This project, which is expected to be completed in the third quarter of 2018, is supported by long-term dedicated NGL production from two planned third-party natural gas processing plants in northern Reeves County, which we estimate will produce up to 40,000 barrels per day (bpd).

RELATED: ONEOK Partners, Fermaca to Construct Pipeline from West Texas to Mexico

The Delaware Basin extension includes:

  •     The construction of an approximately 120-mile, 16-in. pipeline lateral that will have an initial capacity of 110,000 bpd.
  •     The construction of two new pump stations and pipeline looping along the existing West Texas LPG system that will increase its capacity to handle the dedicated volume.

“Extending the West Texas LPG Pipeline into the core of the Delaware Basin, one of the fastest growing plays in the U.S., positions the West Texas LPG system for significant future NGL volume growth,” said Terry K. Spencer, ONEOK president and CEO.

West Texas LPG Pipeline is an NGL pipeline system that consists of approximately 2,600 miles of NGL pipeline in Texas and New Mexico. The system provides transportation services to the Mont Belvieu market center from nearly 40 third-party natural gas processing plants located in the Permian Basin. The Permian Basin in southeastern New Mexico and western Texas is the largest crude oil and natural gas producing basin in the U.S.

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