GAS PROCESSING INFRASTRUCTURE W B P C - M AY 2 0 1 8 - - PowerPoint PPT Presentation

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GAS PROCESSING INFRASTRUCTURE W B P C - M AY 2 0 1 8 - - PowerPoint PPT Presentation

Nov 16, 2022 42 likes •257 views

GAS PROCESSING INFRASTRUCTURE W B P C - M AY 2 0 1 8 FORWARD-LOOKING STATEMENTS Statements contained in this presentation that include company expectations or predictions should be considered forward-looking statements that are covered by the

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W B P C - M AY 2 0 1 8

GAS PROCESSING INFRASTRUCTURE

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P A G E 2

FORWARD-LOOKING STATEMENTS

Statements contained in this presentation that include company expectations or predictions should be considered forward-looking statements that are covered by the safe harbor protections provided under federal securities legislation and other applicable laws. It is important to note that actual results could differ materially from those projected in such forward-looking statements. For additional information that could cause actual results to differ materially from such forward-looking statements, refer to ONEOK’s Securities and Exchange Commission filings. This presentation contains factual business information or forward-looking information and is neither an offer to sell nor a solicitation of an offer to buy any securities of ONEOK. All references in this presentation to financial guidance are based on news releases issued on Jan. 22, 2018, Feb. 26, 2018, and May 1, 2018, and are not being updated or affirmed by this presentation.

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P A G E 3

◆ Approximately 38,000-mile network of natural gas liquids and

natural gas pipelines

◆ Provides midstream services to producers, processors and

customers

◆ Significant basin diversification ◆ Growth expected to be driven by:

  • Industry fundamentals from increased producer activity
  • Highly productive basins
  • Increased ethane demand from the petrochemical industry and

NGL exports

  • INTEGRATED. RELIABLE. DIVERSIFIED.

Natural Gas Gathering & Processing Natural Gas Pipelines Natural Gas Liquids

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P A G E 4

Natural Gas Gathering and Processing

◆ More than 1 Bcf/d of natural gas processing capacity,

increasing to more than 1.2 Bcf/d by 2020

◆ More than 3 million acres dedicated to ONEOK, with

approximately 1 million acres in the core

Natural Gas Liquids

◆ Bakken NGL Pipeline - 140,000 bpd of NGL takeaway

  • Elk Creek Pipeline – expands takeaway to 380,000 bpd

Natural Gas Pipelines

◆ 2.4 Bcf/d of long-haul natural gas transportation capacity

through ONEOK’s 50 percent owned Northern Border Pipeline

WILLISTON BASIN

PROVIDING VALUABLE TAKEAWAY CAPACITY

Natural Gas Gathering Pipelines Demicks Lake Plant Existing Processing Plants Elk Creek Pipeline Bakken NGL Pipeline Northern Border Pipeline (50 percent ownership interest)

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P A G E 5

ONEOK GATHERING & PROCESSING CAPACITY

GROWTH IN THE WILLISTON BASIN

◆ Grown processing capacity from ~50 MMcfd up to nearly 1 Bcfd ◆ Installed 22 new compressor station sites and expanded 6 other

sites

◆ Constructed nearly 3,000 miles of natural gas pipeline ◆ Connected more than 5,000 wells since 2010 ◆ System throughput has doubled 3 times in just 5 years

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P A G E 6

2010 SYSTEM

ONEOK ROCKIES MIDSTREAM

◆ 4,500 miles of pipe ◆ 110 MMcfd processing capacity ◆ 78 MMcfd throughput in Jan-2010

Grasslands Lignite

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P A G E 7

2018 SYSTEM

ONEOK ROCKIES MIDSTREAM

◆ 7,700 miles of pipe ◆ ~1 Bcfd processing capacity ◆ 900 MMcfd throughput in Jan-2018

Grasslands Stateline I&II Garden Creek I,II&III Lignite Lonesome Creek Bear Creek

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Garden Creek plant — North Dakota

G A S P R O D U C T I O N U P D AT E A N D F O R E C A S T

WILLISTON BASIN

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P A G E 9

◆ Drop in volume projections from 2015 to 2016-17 levels suspended much of large-scale natural gas infrastructure

projects not yet nearing completion

◆ ~20% of basin-wide processing capacity un-utilized and appeared to be sufficient until 2022

WILLISTON BASIN

PRODUCTION REWIND

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P A G E 1 0

◆ Entering 2017, the recovery is underway but still looks to be several years before processing capacity is full

WILLISTON BASIN

PRODUCTION REWIND

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P A G E 1 1

◆ Well performance in 2017 far exceeded expectations ◆ Total gas production in Jan. 2018 exceeded:

  • Jan. 2017 forecast by 15% or 275 MMcfd
  • Jan. 2016 forecast by 34% or 520 MMcfd

WILLISTON BASIN

PRODUCTION GROWTH

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P A G E 1 2

◆ Variability in well results complicates production forecasting ◆ Declines are not always consistent and not as steep in some areas

WILLISTON BASIN

PRODUCTION GROWTH

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P A G E 1 3

◆ Producers have adapted to recent crude oil prices with a combination of capital efficiency and improved well

performance

◆ Enhanced completion technologies result in higher IPs and EURs

  • Proppant per lateral foot has more than doubled since 2014
  • Full in-fill development underway, concentrating large volumes from single locations
  • Recompletions adding additional volumes

◆ Resulting in…

  • Lower break-evens across the basin
  • ~1/3 of the rig count needed today to develop same volume as 3 years ago

WILLISTON BASIN

PRODUCTION GROWTH

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Bakken NGL Pipeline — North Dakota

FUTURE GROWTH

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P A G E 1 5

◆ Midstream has responded with announced processing plants totaling 825 MMcfd of capacity ◆ Processors working together to maximize use of basin capacities to bridge near-term gap

WILLISTON BASIN

GAS PROCESSING IMPACTS

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P A G E 1 6

◆ High NGL content of Bakken gas, resulting in significant impact to NGL production associated with higher gas

production

◆ Existing Bakken NGL Pipeline and Overland Pass Pipeline operating at full capacity ◆ Similar constraints to gas processing; projects underway to bridge the near-term gap

WILLISTON BASIN

NGL IMPACTS

45% 43% 42%

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P A G E 1 7

Demicks Lake plant

◆ 200 MMcf/d natural gas processing plant and related infrastructure in McKenzie County, North Dakota

  • $400 million – expected completion in the fourth quarter 2019
  • Increases processing capacity in the region to more than 1.2 Bcf/d

DEMICKS LAKE PLANT

PROCESSING CAPACITY TO SUPPORT PRODUCER GROWTH AND HELP MEET GAS CAPTURE TARGETS

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P A G E 1 8

◆ Long-term solution:

ONEOK Elk Creek Pipeline

  • Approximately 900 miles from Sidney, MT to Bushton, KS
  • 20-inch pipeline
  • Initial capacity of 240,000 bpd, expandable to 400,000 bpd
  • Expected completion in late 2019

ELK CREEK PIPELINE PROJECT

COMPELLING STRATEGIC RATIONALE

Elk Creek Pipeline Existing ONEOK Bakken NGL Pipeline Overland Pass Pipeline (50 percent ownership interest)

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P A G E 1 9

BAKKEN RELATED GROWTH PROJECTS

$3.9 BILLION ANNOUNCED SINCE JUNE 2017

Project Scope CapEx

($ in millions)

Expected Completion

Demicks Lake plant and infrastructure

  • 200 MMcf/d processing plant in the core of the Williston Basin
  • Contributes additional NGL and natural gas volume on ONEOK’s system
  • Supported by acreage dedications and primarily fee-based contracts

$400 Q4 2019 Elk Creek Pipeline project

  • 900-mile NGL pipeline from the Williston Basin to the Mid-Continent with capacity of up to 240,000

bpd, and related infrastructure

  • Supported by long-term contracts, which include minimum volume commitments
  • Expansion capability up to 400,000 bpd with additional pump facilities

$1,400 Q4 2019 Sterling III expansion

  • 60,000 bpd NGL pipeline expansion
  • Increases capacity to 250,000 bpd
  • Includes additional NGL gathering system expansions
  • Supported by long-term third-party contract

$130 Q4 2018 Arbuckle II Pipeline

  • 530-mile NGL pipeline from the Mid-Continent to the Gulf Coast with initial capacity of 400,000 bpd
  • More than 50 percent of initial capacity is contracted under long-term, fee-based agreements
  • Expansion capability up to 1 million bpd with additional pump facilities

$1,360 Q1 2020 MB-4 fractionator

  • 125,000 bpd NGL fractionator and related infrastructure in Mont Belvieu, Texas
  • Fractionation capacity is fully contracted under long-term, fee-based agreements

$575 Q1 2020 Total $3,865

*Represents ONEOK’s 80 percent ownership interest.

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P A G E 2 0

◆ Through 2017, Industry invested more than $11 billion in natural gas infrastructure ◆ Investment continues with announced projects underway over next 18 months totaling $3 billion

  • 650 miles of gas gathering pipe
  • 825 MMcfd new and expanded gas processing capacity
  • 1,025 miles of NGL pipeline for initial 270,000 Bbls/d capacity

◆ Bringing total natural gas related infrastructure investment in the Basin to more than $14 billion:

NATURAL GAS INFRASTRUCTURE

  • 6,150 miles of

pipeline

  • Associated

field compression

Gathering

  • 2.75 Bcf/d new

and expanded gas plants in 20 locations

Processing

  • 1,525 miles of

pipeline

  • Fractionators
  • 520,000 Bbls/d

capacity

NGL Takeaway

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Bear Creek plant — Williston Basin