Attached files
file | filename |
---|---|
8-K - OKE GROWTH PROJECTS 2018 - ONEOK INC /NEW/ | okegrowthprojects2018.htm |
-more-
News
ONEOK to Invest $2.3 Billion
For Additional NGL and Natural Gas Infrastructure
Projects Include Mid-Continent to Gulf Coast NGL Pipeline;
Fractionation Facility in Mont Belvieu, Texas; and
Natural Gas Processing Plant in McKenzie County, North Dakota
TULSA, Okla. – Feb. 21, 2018 – ONEOK, Inc. (NYSE: OKE) today announced plans
to invest approximately $2.3 billion between now and 2020 to construct:
A new 400,000-barrel per day (bpd) natural gas liquids (NGL) pipeline – the Arbuckle
II Pipeline – that will create additional NGL transportation capacity between ONEOK’s
extensive Mid-Continent infrastructure in Oklahoma and the company’s existing NGL
facilities in Mont Belvieu, Texas;
A new 125,000 bpd NGL fractionator – MB-4 – in Mont Belvieu, Texas, and related
infrastructure; and
A new 200-million cubic feet per day (MMcf/d) natural gas processing facility – the
Demicks Lake plant and related infrastructure – in the Williston Basin.
“With more than $4 billion of announced capital-growth projects since June 2017, we
continue to build off of our significant asset footprint,” said Terry K. Spencer, ONEOK
president and chief executive officer.
“The Arbuckle II Pipeline and MB-4 fractionator will help meet the needs of NGL
producers in all of the basins where we operate, including the STACK and SCOOP areas and
the Denver-Julesburg, Powder River, Williston and Permian basins,” said Spencer. “These
strategic projects complement our recently announced Elk Creek pipeline, increasing
ONEOK’s ability to deliver NGLs from the Rocky Mountain region to growing markets in the
Gulf Coast.
“The Demicks Lake plant will provide critical natural gas processing capacity to
accommodate increasing Williston Basin production, helping producers meet natural gas
capture targets in North Dakota,” added Spencer.
February 21, 2018 Analyst Contact: Megan Patterson
918-561-5325
Media Contact: Stephanie Higgins
918-591-5026
Exhibit 99.1
ONEOK to Invest $2.3 Billion For Additional
NGL and Natural Gas Infrastructure
Feb. 21, 2018
Page 2
These projects are expected to generate adjusted earnings before interest, taxes,
depreciation and amortization (adjusted EBITDA) multiples of four to six times. Following
ONEOK’s recently completed equity issuances totaling approximately $1.6 billion, project
funding is expected to come from cash generated from operations and short- and long-term
borrowings. ONEOK does not expect to issue additional equity in 2018 and well into 2019.
Arbuckle II Pipeline and MB-4:
The approximately 530-mile, 24- and 30-inch diameter Arbuckle II Pipeline is expected
to cost approximately $1.36 billion and will have an initial capacity to transport up to 400,000
bpd of unfractionated NGLs originating across ONEOK’s supply basins and extensive NGL
gathering system to the company’s storage and fractionation facilities at Mont Belvieu. The
Arbuckle II Pipeline is expected to be completed in the first quarter 2020. The pipeline will
have the capability to be expanded up to 1 million bpd with additional pump facilities, which
could more than double ONEOK’s current capacity between the Mid-Continent and Gulf
Coast.
The new MB-4 fractionator and related infrastructure, which includes additional NGL
storage capacity in Mont Belvieu, are expected to cost approximately $575 million and be
completed in the first quarter 2020. ONEOK’s total NGL fractionation capacity will increase to
965,000 bpd following the completion of MB-4.
The initial capacity of the Arbuckle II Pipeline is more than 50 percent contracted, and
MB-4 is fully contracted. Both are anchored by long-term contracts with terms ranging between
10 to 20 years. Adjusted EBITDA multiples for these projects are based only from these
commitments but additional supply agreements continue to be negotiated.
Demicks Lake plant and related infrastructure:
The Demicks Lake natural gas processing plant and related field infrastructure are
expected to cost a total of approximately $400 million and be completed during the fourth
quarter 2019. The Demicks Lake plant will be built in McKenzie County, North Dakota, which
is in the core area of the Williston Basin. The plant is supported by acreage dedications with
primarily fee-based contracts.
The Demicks Lake plant is expected to contribute additional NGL volumes to
ONEOK's NGL gathering system and natural gas volumes to ONEOK’s 50 percent-owned
Northern Border Pipeline.
ONEOK’s Williston Basin natural gas processing capacity will increase to more than
1.2 billion cubic feet per day following the completion of the Demicks Lake plant.
EDITOR'S NOTE:
ONEOK to Invest $2.3 Billion For Additional
NGL and Natural Gas Infrastructure
Feb. 21, 2018
Page 3
View a map of the proposed projects.
NON-GAAP (GENERALLY ACCEPTED ACCOUNTING PRINCIPLES) FINANCIAL
MEASURES:
ONEOK has disclosed in this news release forward-looking estimates for projected adjusted
EBITDA multiples expected to be generated by the announced capital-growth projects.
Adjusted EBITDA is a non-GAAP financial metric used to measure the company’s financial
performance. Adjusted EBITDA is defined as net income from continuing operations adjusted
for interest expense, depreciation and amortization, noncash impairment charges, income taxes,
noncash compensation expense, allowance for equity funds used during construction (equity
AFUDC), and other noncash items. Adjusted EBITDA multiples for the announced capital-
growth projects reflect the expected adjusted EBITDA to be generated by the projects relative
to the capital investment being made.
Adjusted EBITDA and adjusted EBITDA multiples are useful to investors because these
and similar measures, are used by many companies in the industry as a measure of financial
performance and commonly employed by financial analysts and others to evaluate ONEOK’s
financial performance and of its capital-growth projects and to compare the financial
performance of ONEOK with the performance of other companies within its industry. Adjusted
EBITDA should not be considered in isolation or as a substitute for net income or any other
measure of financial performance presented in accordance with GAAP. Additionally, this
calculation may not be comparable with similarly titled measures of other companies.
A reconciliation of estimated adjusted EBITDA to GAAP net income is not provided because
the GAAP net income generated by the projects is not available without unreasonable efforts.
-------------------------------------------------------------------------------------------------------------------
ONEOK, Inc. (pronounced ONE-OAK) (NYSE: OKE) is one of the largest energy midstream service providers in the
U.S., connecting prolific supply basins with key market centers. It owns and operates one of the nation's premier
natural gas liquids (NGL) systems and is a leader in the gathering, processing, storage and transportation of natural
gas. ONEOK’s operations include a 38,000-mile integrated network of NGL and natural gas pipelines, processing
plants, fractionators and storage facilities in the Mid-Continent, Williston, Permian and Rocky Mountain regions.
ONEOK is a FORTUNE 500 company and is included in Standard & Poor's (S&P) 500 index.
For information about ONEOK, visit the website: www.oneok.com.
For the latest news about ONEOK, find us on LinkedIn, Facebook or Twitter @ONEOK.
Some of the statements contained herein are forward-looking statements as defined under federal securities laws.
The forward-looking statements relate to our anticipated financial performance (including projected net income,
capital expenditures, cash flow and projected levels of dividends), liquidity, management’s plans and objectives for
our future growth projects and other future operations (including plans to construct additional natural gas and
natural gas liquids facilities and related cost estimates), our business prospects, the outcome of regulatory and
ONEOK to Invest $2.3 Billion For Additional
NGL and Natural Gas Infrastructure
Feb. 21, 2018
Page 4
legal proceedings, market conditions and other matters. We make these forward-looking statements in reliance on
the safe harbor protections provided under federal securities legislation and other applicable laws.
Forward-looking statements include the items identified in the preceding paragraph, the information concerning
possible or assumed future results of our operations and other statements contained herein identified by words
such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “should,” “goal,” “forecast,” “guidance,”
“could,” “may,” “continue,” “might,” “potential,” “scheduled” and other words and terms of similar meaning.
You should not place undue reliance on the forward-looking statements. Known and unknown risks, uncertainties
and other factors may cause our actual results, performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by the forward-looking statements. Those factors
may affect our operations, markets, products, services and prices. In addition to any assumptions and other factors
referred to specifically in connection with the forward-looking statements, factors that could cause our actual results
to differ materially from those contemplated in any forward-looking statement include, among others, those factors
listed under “Forward-looking Statements” in our Quarterly Report on Form 10-Q for the quarter ended Sept. 30,
2017, and in our other filings that we make with the SEC, which are available via the SEC’s website at www.sec.gov
and our website at www.oneok.com.
These factors are not necessarily all of the important factors that could cause actual results to differ materially from
those expressed in any of our forward-looking statements. Other factors could also have material adverse effects
on our future results. These and other risks are described in greater detail under the caption “Risk Factors” in our
Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2016 and in our other filings that we make with the
SEC, which are available via the SEC’s website at www.sec.gov and our website at www.oneok.com. All forward-
looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these
factors. Any such forward-looking statement speaks only as of the date on which such statement is made, and other
than as required under securities laws, we undertake no obligation to update publicly any forward-looking statement
whether as a result of new information, subsequent events or change in circumstances, expectations or otherwise.
Projects are subject to approvals from state and regulatory agencies.
###
NGL Gathering Pipelines
NGL Distribution Pipelines
Arbuckle II Pipeline
NGL Market Hub
MB-4 Fractionator
Existing Fractionator
TEXAS
OKLAHOMA
Medford
Arbuckle II Pipeline and MB-4 Fractionation Facility
Bowman
Adams
Sioux
HettingerSlope
Emmons
Fallon
Grant
Custer
Morton
Stark
Prairie Oliver
Burleigh Kidder
Golden Valley
Billings
Wibaux
Mercer
Dawson
Dunn
Sheridan Wells
McLean
McCone McKenzie
Richland
PierceMountrail
Roosevelt
McHenry
Williams
Ward
Sheridan
RenvilleBurke
Divide
Daniels
Bottineau Rolette
MONTANA
NORTH DAKOTA
Natural Gas Gathering Pipelines
Demicks Lake Plant
Existing Processing Plants
Elk Creek Pipeline
Bakken NGL Pipeline
Northern Border Pipeline
(50 Percent Ownership Interest)
Williston Basin
Demicks Lake Natural Gas Processing Facility