Report Volume XXVIII, Number 21 July 1, 2017

June 26, 2017

INDUSTRY NEWS (TULSA, OK) – ONEOK, Inc. announced plans to expand its Mid-Continent natural gas liquids (NGL) gathering system and its existing Sterling III Pipeline. The expansions, which are backed by a long-term contract with a subsidiary of EnLink Midstream Partners, LP and EnLink Midstream, LLC (EnLink), will help accommodate expected volume growth from current and certain future EnLink natural gas processing plants in the STACK play in western Oklahoma along with expected growth from other customers in the region.

“Producers continue to accelerate their investments in the STACK due to the higher-return economics driven by strong crude oil and NGL-rich natural gas production rates,” said Terry K. Spencer, ONEOK president and chief executive officer. “This expansion of our NGL gathering system further underscores our ability to meet the NGL service needs of STACK-area natural gas processors and demonstrates our continued commitment to providing reliable high-quality service to our customers.”

Expansions include increasing capacity on the Sterling III Pipeline to 250,000 barrels per day (bpd) from 190,000 bpd and connecting ONEOK’s Arbuckle Pipeline to EnLink’s Cajun-Sibon Pipeline in southeast Texas. ONEOK’s Sterling III Pipeline transports either unfractionated NGLs or NGL purity products between ONEOK’s Mid-Continent NGL infrastructure and similar facilities on the Gulf Coast in Mont Belvieu, Texas.

ONEOK expects to invest approximately $130 million for these projects, which are expected to be complete by the end of 2018.

ONEOK’s natural gas liquids segment currently gathers 150,000 to 200,000 bpd of NGLs out of the STACK and SCOOP plays and is connected to more than 100 third-party natural gas processing plants in the Mid-Continent. The NGL volumes from the EnLink plant connections and other production are part of an incremental 100,000 bpd of expected NGL supply out of the STACK and SCOOP plays that ONEOK expects to add to its system by the end of 2018.

In addition, to support the increasing producer activity in the STACK and SCOOP on dedicated acreage in the natural gas gathering and processing segment, ONEOK has entered into a long-term processing services agreement with a third party to gain access to an additional 200 million cubic feet per day (MMcf/d) of natural gas processing capacity in this region.

“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 added.

ONEOK plans to connect its extensive natural gas gathering system to the existing third-party natural gas processing facility in northern Oklahoma by constructing a nearly 30-mile natural gas gathering pipeline and related infrastructure through the core of the STACK play in Blaine County, Oklahoma. The pipeline is expected to cost approximately $40 million and be completed by the end of 2017.

 

 

INDUSTRY NEWS (Houston, TX) – A subsidiary of Plains All American Pipeline, L.P.  announced that it is conducting an open season for committed crude oil pipeline capacity from the Delaware Basin to Cushing, OK (the “Pipeline”). The Pipeline will originate at Conan Station in Loving County, Texas. Depending on the results of the open season, committed volumes will move on a combination of new and existing pipelines. The open season provides an opportunity for potential shippers to offer long-term volume commitments in exchange for firm transportation on the Pipeline.

The Pipeline will deliver to Plains’ and third-party terminals in Cushing, OK. Subject to sufficient commitments from shippers and receipt of any necessary permits and regulatory approvals, the Pipeline could be operational in mid-2019.

The open season began on June 16, 2017 and will end at 5 p.m. CT on July 17, 2017.

 

 

INDUSTRY NEWS (Dallas, TX) – Primoris Services Corporation announced that it has acquired the assets of Coastal Field Services (“Coastal”).  Based in Beaumont, Texas, Coastal provides pipeline construction and maintenance, pipe and vessel coating and insulation, and integrity support services for leading companies in the oil and gas industry.  The company targets midstream oil and gas companies that utilize pipelines and storage vessels for their products.

Coastal will operate as Primoris Coastal Field Services (“PCFS”), part of Primoris’ Pipeline and Underground segment.  Jeff Bridges, former co-owner and president, will continue to manage day-to-day operations as President of PCFS.

David King, Primoris President and CEO, commented, “The acquisition of Coastal dovetails well with the work performed by our Primoris Pipeline and Field Services groups.  It allows us to offer our clients a wider range of services, including compressor station capital projects, pipeline integrity work, call-out work, and insulation of plant piping and vessels.  Coastal provides Primoris an opportunity to increase our market share in the Gulf Coast energy market.  We welcome Coastal and its employees to the Primoris family.”

 

 

INDUSTRY NEWS (Bismarck, ND) – The North Dakota Public Service Commission (PSC) recently approved two steps needed for Montana Dakota Utilities (MDU) to move forward with constructing a pipeline project that will begin in Milnor, North Dakota and continue to Gwinner.

The project would provide natural gas service to Ransom and Sargent counties, including service to Clark Equipment and Company’s Bobcat manufacturing facility in Gwinner, Bobcat’s largest facility in the
United States. The project will also have the capacity to expand to other potential customers along the proposed route.

The 12″ pipeline would run for 21 miles and tap into the Alliance Pipeline northeast of Milnor.

“The proposed infrastructure project is an excellent example of two prominent companies operating in North Dakota, working collaboratively together to further support industry and jobs within our state’s borders,” Commissioner Brian Kroshus said.

The certificate issued by the commission takes into consideration the need for the service, the utility’s ability to provide the service, the effect of the project on other utilities and whether the proposed service is sufficient. Currently, no other utilities offer natural gas service in the area.

The approved service agreement is for 15 years and contains provisions to allow additional customers to be served by the natural gas line. MDU filed a request to determine if the pipeline is under the commission’s siting jurisdiction, which would necessitate a permit for the location of the pipeline.

The project will cost an estimated $13.8 million. Bobcat will cover the cost of construction and the project will result in increased revenues for MDU. It will not cause a rate increase for other MDU customers.

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