Oneok rejects less Bakken ethane

Oneok Partners said NGL throughput on its Bakken pipeline reached 100,000 b/d in July amid less ethane rejection in the Rocky Mountains.

Throughput on the Bakken NGL line is likely to hit 105,000 b/d later this year.

Oneok is rejecting less ethane in order to help strip out high oxygen levels in propane and butane produced in the region, senior vice president for NGLs Sheridan Swords said on an earnings call today.

"We started the ethane recovery in June," Swords said. "We think the level of ethane we're extracting today is enough to bring these products to a specification we can handle and get it to the end use market."

Chief executive Terry Spencer said declines in Bakken rig counts are not significantly impacting NGL production in the region.

"Our producer customers are increasing volumes with fewer but more efficient rigs and completion techniques," Spencer said. "Our 2016 volume growth is expected to be led by growth in the Williston basin."

Oneok affirmed phase two of its 25,000 b/d Bakken NGL pipeline expansion is on track for completion in the second quarter of 2016, and its 40-mile Bear Creek NGL pipeline in the Williston Basin is also slated to be finished in the third quarter of 2016.

However, the proposed 65-mile Bronco NGL line in the Powder River Basin and the 12-mile Demicks Lake NGL line in the Williston Basin have been suspended.

Oneok's 260mn cf/d WesTex natural gas pipeline expansion in the Permian Basin is still scheduled for completion in the first quarter of 2017. The 170mn cf/d first phase of Oneok's Roadrunner gas transmission pipeline in the Permian is scheduled for completion in the first quarter of next year. Subsequent Roadrunner expansions are slated to come online in the first quarter of 2017 and into 2019, bringing that pipeline's total throughput to 640mn cf/d.

Oneok's Sage Creek gas processing plant in the Powder River basin is slated for completion in the fourth quarter of 2015, and its new Lonesome Creek gas processing plant is also scheduled to come online by the end of the year.

Second quarter profits rose by 7.2pc from last year to $150.88mn.

Margins on NGL transportation and fractionation rose 18pc from year-ago levels to $313.4mn during the second quarter, as the volumes of NGLs gathered outweighed declines in commodity prices. Oneok sold 723,000 b/d of NGLs, up from 603,000 b/d in 2014, and transported 784,000 b/d of NGLs, up from only 520,000 b/d last year. Fractionation volumes rose by 6.5pc to 554,000 b/d versus 2014.

Oneok expects NGL fractionation volumes to reach 580,000 b/d by the fourth quarter. In July they briefly hit 600,000 b/d.

als/dcb

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