ONEOK Partners announced plans to invest another $140 million to $160 million to construct a 270-mile natural gas gathering system and related infrastructure in Divide County, N.D.
The new system, which is expected to be completed in the second half of 2013, will gather and deliver natural gas from producers in the Bakken Shale in the Williston Basin to the partnership's previously announced 100 million cubic feet per day (MMcf/d) Stateline II natural gas processing facility in western Williams County, N.D. The Stateline II plant is expected to be in service in the first half of 2013. The partnership has secured long-term supply commitments from producers structured with percent-of-proceeds and fee-based components.
"Expanding our natural gas gathering system into Divide County will open up new development potential for the partnership and will give producers developing the Bakken Shale and Three Forks plays the infrastructure they need to process and deliver natural gas to the marketplace," said Terry K. Spencer, ONEOK Partners president. "This project is the latest example of our ongoing commitment to provide value-added services to producers and reduce the amount of natural gas being flared in the Bakken Shale."
In aggregate, the new gathering system and related infrastructure are expected to generate EBITDA (earnings before interest, taxes, depreciation and amortization) multiples of five to seven times. The incremental earnings from these projects are expected to increase distributable cash flow and value to unitholders in the form of higher distributions.
In addition to the Divide County natural gas gathering system, ONEOK Partners previously announced it will invest approximately $1.5 billion to $1.8 billion for growth projects in the Bakken Shale between 2011 and 2014 in its natural gas gathering and processing and natural gas liquids (NGL) businesses. These investments include the construction of an approximately 500-mile NGL pipeline – the Bakken Pipeline – and three 100 MMcf/d natural gas processing facilities including the Garden Creek plant, Stateline I plant and Stateline II plant. The Garden Creek plant went into service in December 2011.
With the completion of the Divide County natural gas gathering system, the partnership will have installed the necessary natural gas gathering infrastructure sufficient to fill all four of the partnership's natural gas processing plants in the Bakken Shale and Three Forks regions.