Recently, ONEOK Partners L.P. (OKS) signed a letter of intent for a 10-year term with Targa Resources Partners L.P. (NGLS) for additional fractionation capacity at Targa’s Cedar Bayou fractionator, a natural gas liquids fractionation facility located at Mont Belvieu, Texas. The company expects the expansion to be operational during the first quarter of 2011, subject to regulatory approvals.
Under the terms of the agreement, ONEOK partners will contract for 60,000 barrels per day of fractionation capacity at Targa’s facility. Targa is currently expanding its fractionator capacity to 275,000 barrels per day from 215,000 barrels per day.
With the additional fractionation capacity, ONEOK Partners expects to better serve its NGL producers and customers from new supplies in the Mid-Continent, north Texas and Rocky Mountain regions. As part of the expansion, Targa Resources Partners and ONEOK Partners plan to construct interconnect facilities that link Targa Resources Partners’ fractionation facility with ONEOK Partners’ recently completed Arbuckle Pipeline and on to ONEOK Partners’ fractionation and storage facilities at Mont Belvieu. The Arbuckle Pipeline is a 440-mile raw NGL pipeline extending from southern Oklahoma through the Barnett Shale of north Texas.
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