May 2011, Vol. 238 No. 5

Projects

ONEOK Partners To Build NGL Pipeline And Fractionator to Serve Gulf Coast Market

ONEOK Partners, L.P. plans to invest $910 million to $1.2 billion between now and late 2013 in order to:

1) construct a 570-plus-mile, 16-inch natural gas liquids (NGL) pipeline, the Sterling III Pipeline, to transport either unfractionated NGLs or NGL purity products from the Mid-Continent region to the Texas Gulf Coast; 2) reconfigure its existing Sterling I and II NGL distribution pipelines to transport either unfractionated NGLs or NGL purity products; and 3) build a 75,000-bpd NGL fractionator, MB-2, at Mont Belvieu, TX.

The new Sterling III Pipeline will cost $610-810 million and will have an initial capacity to transport 193,000 bpd of either unfractionated NGLs or NGL purity products from the partnership’s NGL infrastructure at Medford, OK to its storage and fractionation facilities at Mont Belvieu. Once complete, it will double the partnership’s pipeline capacity between Medford and Mont Belvieu.

The investment also includes reconfiguring the existing Sterling I and II pipelines – which distribute NGL purity products between the Mid-Continent and Gulf Coast NGL market centers – to transport unfractionated NGLs or NGL purity products.

The Sterling III Pipeline will complement the partnership’s existing Sterling I and II pipelines, and when operational, all three Sterling pipelines will be capable of transporting either unfractionated NGLs or purity NGL products. Completion is scheduled in late 2013. With additional pump stations, the Sterling III Pipeline’s capacity can be expanded to 250,000 bpd.

The Sterling III Pipeline will traverse the NGL-rich Woodford Shale now under development as well as provide transportation capacity for NGL production from the growing Cana-Woodford Shale and Granite Wash where it can gather unfractionated NGLs from the natural gas processing plants being built as a result of increased drilling activity.

The MB-2 fractionator will cost $300-390 million to construct and will supplement the partnership’s 80% owned, 160,000-bpd MB-1 fractionator in Mont Belvieu. Its initial 75,000-bpd capacity can be expanded to 125,000 bpd to accommodate additional NGL volumes as they are added to the expanding Arbuckle Pipeline, the Sterling III Pipeline and the Sterling I and II reconfiguration.

The partnership submitted a permit application to build the 75,000-bpd fractionator to the Texas Commission on Environmental Quality. Following receipt of all necessary permits, construction of the fractionator is scheduled to begin in 2011 and is expected to be completed in mid-2013.