US ONEOK to build NGL pipeline from Montana to Kansas

HOUSTON (ICIS)–ONEOK plans to build a pipeline from eastern Montana to Kansas that will ship natural gas liquids (NGLs), the US-based midstream company said on Thursday.

The Elk Creek pipeline will span 900 miles (1,400 km) and carry 240,000 bbl/day of NGLs from the company’s Riverview terminal in Montana to Bushton, Kansas, ONEOK said. It is expected to be completed by the end of 2019.

The pipeline will cost $1.2bn, and related infrastructure will cost another $200m. The pipeline could be expanded to 400,000 bbl/day if ONEOK builds more pump facilities.

The company is building the pipeline because the Bakken NGL and Overland Pass pipelines are already operating at full capacity, said Terry Spencer, CEO. “Additional NGL takeaway capacity is critical to meeting the needs of producers who are increasing production and are required to meet natural gas capture targets in the Williston basin.”

The Elk Creek pipeline will strengthen ONEOK’s position in the Bakken, Powder River and Denver-Julesburg regions, he said.

The new pipeline is anchored by long-term contracts of 10-15 years totalling 100,000 bbl/day, ONEOK said.

NGLs like ethane and propane are used as feedstock for the US petrochemical industry.

(recasts with expected completion)