Back to top

Analyst Blog

ONEOK Partners L.P. (OKS - Analyst Report) continues to expand its existing operations by adding new infrastructure to its portfolio. The partnership announced that it will invest additional $0.65 - $0.78 billion in Williston Basin between fourth-quarter 2013 and second-quarter 2016. Between 2010 and 2016, the partnership intends to invest a total of $3.1 - $3.4 billion in the aforesaid region for numerous growth projects.

ONEOK Partners will utilize the additional funds for its three growth projects - a new natural gas processing facility and allied infrastructure, and second phase expansion of the existing Bakken natural gas liquids (“NGL”) pipeline.

During third-quarter 2013 earnings call, ONEOK Partners announced that it will deploy $5.3 - $5.6 billion, within a time span of 2010 to 2015, for several growth projects. The current announcement increased the partnership’s capital spending level to $6 - $6.4 billion through 2016. ONEOK Partners intends to allocate $3 - $3.2 billion each for natural gas gathering and processing as well as NGL projects.

The partnership plans to allocate $0.32 - $0.39 billion to construct a new natural gas processing facility called the Lonesome Creek plant. The new set up has a capacity to process 200 million cubic feet per day (“MMcf/d”).

In addition, the partnership will invest $0.23 - $0.29 billion to expand and improve its existing natural gas gathering and compression assets.

These growth projects are based in McKenzie County, N.D. and in the Bakken Shale in the Williston Basin. Both the projects are expected to be online by the end of 2015.

ONEOK Partners will invest an additional $0.1 billion to expand its existing Bakken NGL pipeline for accommodating a rise in NGL volume level due to construction of Lonesome Creek plant. The pipeline expansion is expected to be in service from the first half of 2016. Post completion, the pipeline will carry 160,000 barrels per day (“bpd”) from the initial capacity of 60,000 bpd.

Bakken Shale is situated in western North Dakota, Eastern Montana, and Saskatchewan and Manitoba in the Williston Basin. As per a U.S. Geological Survey, Bakken Shale has 3.65 billion barrels of recoverable crude oil, 2.0 trillion cubic feet of gas and 150 million barrels of NGL.

The mineral rich region continues to attract the petroleum companies to do more exploration and production activities. This will subsequently increase demand for processing, gathering and transporting services.

As the largest independent operator of natural gas gathering and processing facilities in the Williston Basin, ONEOK Partners intends to invest more in Bakken Shale to cater to the increasing demand from upstream operators. Apart from the partnership, other pipeline operators such as Plains All American Pipeline L.P. (PAA - Analyst Report) and Hess Corporation (HES - Analyst Report) are also strengthening their footprint in the region. Plains All American Pipeline has already started construction of a cryogenic gas processing plant in this area.

ONEOK Partners currently has a Zacks Rank #3 (Hold). Another stock from the industry that is presently performing better is Magellan Midstream Partners LP (MMP - Analyst Report) with a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
SYNAPTICS I… SYNA 78.11 +8.14%
GREEN PLAIN… GPRE 39.41 +5.12%
PILGRIM'S P… PPC 28.82 +3.08%
SKYWORKS SO… SWKS 52.07 +2.58%
CLAYTON WIL… CWEI 109.08 +2.51%