Tulsa, Oklahoma-based ONEOK Partners LP is planning to invest approximately $605 million to $785 million between now and the end of the third quarter 2016 to expand natural gas infrastructure in North Dakota’s Bakken shale region.
The investment will go toward three projects that will increase processing and transportation capacity in the Williston Basin and help reduce natural gas flaring in the state.
ONEOK plans to build a new 200-million cubic feet per day (MMcf/d) natural gas processing facility, called the Demicks Lake plant, and related infrastructure in northeast McKenzie County, North Dakota, which will process natural gas produced from the Bakken shale in the Williston Basin.
The company also plans to add another 100 MMcf/d of natural gas compression to take advantage of additional natural gas processing capacity at the existing Garden Creek and planned Stateline natural gas processing plants.
Finally, ONEOK proposes to build approximately 12 miles of natural gas liquids (NGL) gathering pipeline from the Demicks Lake plant to the partnership’s existing Bakken NGL pipeline.
“The Demicks Lake plant and additional natural gas compression will increase our natural gas processing capacity in areas that continue to be developed aggressively by crude oil and natural gas producers,” said ONEOK president and CEO Terry K. Spencer.
The additional 300 MMcf/d in the Williston Basin will increase the company’s natural gas processing capacity to approximately 1.1 billion cubic feet per day (Bcf/d) in the region, Spencer added.
“Pending board approval, we expect to announce additional Williston Basin natural gas processing capacity by the end of this year,” he said.
In addition to these projects, ONEOK also announced that its Garden Creek III natural gas processing plant is ahead of schedule. The project was originally scheduled for completion in the first quarter 2015, but now is slated for completion in the fourth quarter 2014.
“The completion of this plant, now a 120-MMcf/d natural gas processing facility with the additional capital investment in compression, combined with other ongoing investments in the Williston Basin, will provide the partnership with additional natural gas and NGL volumes while also creating long-term value for our unit holders,” said Spencer.
Since 2010, ONEOK has constructed or is constructing seven new natural gas processing plants and related natural gas gathering infrastructure in the Williston Basin, which will increase the partnership’s natural gas processing capacity in the region by more than 10 times by the end of 2016.
The Demicks Lake natural gas processing plant and related infrastructure are expected to cost approximately $515 million to $670 million and be completed during the third quarter 2016.
“Crude oil and natural gas production in the Williston Basin continues to increase, and we remain committed to building essential natural gas gathering and processing infrastructure that will enable producers to capture and process these growing volumes and reduce natural gas flaring in North Dakota,” said Spencer. “With an industry goal to reduce natural gas flaring to 5 to 10 percent of total production in 2020 in North Dakota, we will continue to commit resources to building critical infrastructure to meet this goal.”
Including these projects, ONEOK has announced total investments exceeding $7 billion through 2016 for acquisitions and infrastructure growth projects related to natural gas gathering and processing and natural gas liquids. Nearly $4 billion is for growth projects related to resource development in the Williston Basin, North Dakota.