With an intention to enhance its Natural Gas Liquids (NGL) transportation capacity ONEOK Partners L.P. (OKS) has decided to invest between $180 million and $240 million in the Cana-Woodford Shale and Granite Wash plays.
These investments will be made in phases, between now and the first half of 2012. Once completed this project will boost the existing transportation capacity of the partnership in the Mid-Continent and the Arbuckle Pipeline by 75,000 to 80,000 barrels per day (bpd).
The partnership will construct more than 230 miles of 10 and 12 inch diameter pipeline to expand its existing capacity in Mid-Continent gathering system and also install some pump stations on the Arbuckle Pipeline to increase its present capacity to 240,000 bpd.
The partnership is consistently investing to expand its existing capacity. Excluding this fresh investment, year to date, ONEOK has announced investments in the range of $1.3 billion to $1.6 billion. The most recent one, in the Bakken Shale, in the range of $300 million to $355 million aimed to enhance the partnership’s natural gas processing capacity and improve its infrastructure.
During the third quarter earnings call, the partnership announced 2010 net income guidance in a range of $450 million to $470 million. The Zacks Consensus Estimates for fourth quarter fiscal 2010, fiscal year 2010 and fiscal year 2011 are $1.00 per unit, $3.33 per unit and $3.89 per unit, respectively.
El Paso Corporation (EP), one of ONEOK’s peers, recently formed a new joint venture with Kohlberg Kravis Roberts & Co. (KKR) to develop natural gas processing plants and pipelines.
ONEOK Partners currently retains a Zacks #3 Rank (short-term Hold rating). We maintain our long-term Neutral rating on the stock.
Based in Tulsa, Oklahoma, ONEOK Partners is one of the largest publicly traded master limited partnerships and is a leader in the gathering, processing, storage and transportation of natural gas in the United States.
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