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ONEOK Partners Completes Garden Creek II in Williston Basin

Zacks Equity Research

ONEOK Partners L.P. (OKS) continues to expand its operations in the Williston Basin. The partnership has completed a natural gas processing facility called the Garden Creek II plant. The eastern McKenzie County, ND-based facility has the capacity to process 100-million cubic feet per day (MMcf/d) of natural gas.

The latest venture is a part of ONEOK Partners’ $7.0–$7.5 billion capital growth program through 2016. The partnership having invested $0.31–$0.35 billion in the plant has completed it on time.

As a result of this latest development, ONEOK Partners’ natural gas processing capacity at Williston Basin has currently crossed the 500 MMcf/d mark. The partnership aims to further increase its natural gas processing capacity to over 600 MMcf/d in the fourth quarter of 2014 and to around 1.1 billion cubic feet per day by third-quarter 2016.

Williston Basin is located in Montana, western North Dakota and South Dakota in the U.S. and Manitoba and Saskatchewan in Canada. The Bakken Shale is among Williston Basin’s prime properties. As per a U.S. Geological Survey, Bakken Shale alone has reserves of 2.0 trillion cubic feet of natural gas, 3.65 billion barrels of recoverable crude oil and 150 million barrels of natural gas liquids (NGL).

Exploration and production companies are drilling actively in the Williston Basin to tap these vast reserves of natural resources. We remind investors that several oil and natural gas companies, including WPX Energy, Inc. (WPX) and QEP Resources, Inc. (QEP), are actively trying to unlock the prospects in the region.

As the upstream players are active in the Williston Basin, the demand for midstream services will concomitantly rise in the region. ONEOK Partners has decided to invest more in the basin to cater to the increasing demand from the upstream players. Apart from ONEOK Partners, its peer Energy Transfer Partners LP (ETP) is also strengthening its footprint in the region by installing the new Bakken Pipeline.

ONEOK Partners intends to invest around $4.0 billion through 2016 for the building out of midstream infrastructure in the Williston Basin. The partnership is also progressing well on several of its ventures including Garden Creek III, Lonesome Creek and Demicks Lake plants. The scheduled completion of these ventures will enable ONEOK Partners to serve more customers, thereby increasing cash inflows.

ONEOK Partners currently has a Zacks Rank #3 (Hold).

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