Oneok to invest in Bakken, Woodford shale projects

Warren R. True
Chief Technology Editor-LNG/Gas Processing

HOUSTON, Apr. 22 -- Oneok Partners LP, Tulsa, will invest $405-470 million through yearend 2011 on projects to expand gathering and processing in the Bakken shale in Williston basin in North Dakota and the Woodford shale in Oklahoma.

These projects are part of a previously announced $2.5-3.5 billion in projects the partnership has identified for investment by yearend 2015.

North Dakota
Included is construction of the 100-MMcfd Garden Creek natural gas processing plant in eastern McKenzie County, ND, and related expansions. Oneok estimates these expansions will cost $150-210 million and double the partnership's processing capacity in the Williston basin. Completion is expected in fourth-quarter 2011.

In addition to the plant, Oneok’s gas gathering and processing segment will invest $200-205 million during 2010-11 for new well connections, expansions, and upgrades to existing gas gathering in the Bakken shale.

These investments include expansion and upgrade of gas gathering and addition of new compression to serve the new Garden Creek plant; gas gathering and compression upgrades to bring the existing 100-MMcfd Grasslands gas plant in McKenzie County to full capacity by yearend 2010; and $90 million to connect more than 300 wells in 2010 and about 400 wells in 2011 to the partnership's Williston basin gathering system.

In March 2009, Oneok completed a $46-million expansion of the Grasslands plant and since 2007 has invested more than $80 million in new well connections and related upgrades to existing gas gathering in the region.

Oneok Partners Chief Operating Officer Terry K. Spencer said, in the announcement, that producers with large acreage dedications to Oneok’s assets “continue to aggressively develop these areas and need additional infrastructure.”

With a gathering system of more than 3,500 miles, Oneok Partners says it is the largest independent operator of natural gas gathering and processing facilities in the Bakken shale.

Oklahoma
In 2010-11, Oneok will invest an additional $55 million in the Woodford shale in Oklahoma on gas gathering and processing and NGL segments.

These investments will connect the partnership's western Oklahoma gas gathering to its existing 135-MMcfd Maysville gas plant in Garvin County in central Oklahoma, allowing it to accommodate growing production in the Woodford shale. The project is under construction and expected to be completed during this year’s fourth quarter.

These investments also include about $20 million for new well connections in 2010-11 to gather more Woodford shale volumes.

In the partnership's NGL segment, capital investments include expansion of the partnership's existing Oklahoma NGL gathering system to connect to the new 200-MMcfd gas plant currently under construction by Devon in Canadian County, Okla. and expected to be completed by yearend or early 2011. This expansion will increase accessibility of this new supply to the partnership's Arbuckle pipeline and Mont Belvieu, Tex., fractionation.

Since 2007, Oneok says, it has invested about $70 million in the Woodford shale.

Contact Warren R. True at warrent@ogjonline.com.

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