Oneok Partners LP said it will spend between $1.5 billion to $1.8 billion to build a 1,300-mile crude-oil pipeline between the Bakken Shale in North Dakota and the Cushing, Okla. crude-oil market hub, marking the company's entry into the crude-oil transportation business.
The Bakken Crude Express Pipeline will have the capacity to transport 200,000 barrels per day. The move comes as Oneok Partners--the gas-gathering and transportation unit of Oneok Inc.--has been increasing its spending plans for the Bakken Shale region.
The latest project will "provide producers with efficient and reliable transportation of their product directly to one of the largest crude-oil market hubs in the U.S. said Oneok Partners President Terry K. Spencer. The pipeline utilizes the company's core capabilities of transporting natural gas, natural gas liquids and refined petroleum products, Spencer added.
Construction is expected to begin in late 2013 or early 2014 and be completed by early 2015. The proposed pipeline route will also be well-positioned to transport crude-oil from the Niobrara Shale, Oneok said.
The company has already said it is investing $2.8 billion to $3.5 billion through 2014 in growth projects, including $1.6 billion to $2 billion in projects related to the Bakken Shale. Most recently, the company on Wednesday said it plans to spend an additional $140 million to $160 million to construct a 270-mile natural-gas-gathering system and infrastructure in North Dakota.
Oneok Partners shares closed at $54.93 Thursday and were inactive premarket. Markets were closed Friday for the Good Friday holiday. The stock is up 32% in the past 12 months.