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ONEOK Suspends Select Expansion Projects



ONEOK Suspends Select Expansion Projects
The company has also cut 2020 capex by $500 million.

77彩票注册官网ONEOK Inc. has cut its 2020 growth capital guidance due to the current commodity price environment. The company now expects capital-growth expenditures in the range of $1.60 billion to $2.40 billion with a midpoint of $2.0 billion, a drop of about $500 million.

"Given the significant inventory of flared natural gas in the Williston Basin and fully contracted growth in the Permian Basin, and factoring in the current commodity price environment and assumed rig reductions, we expect our 2020 results to be within our previously announced guidance ranges," said Terry K. Spencer, ONEOK president and chief executive officer.

77彩票注册官网Break-even prices for the company’s well-capitalized producer customers have improved during the last few years, which gives management confidence that the Williston Basin is expected to remain a competitive producing region through this commodity price environment, Spencer added.

"The potential for ethane recovery to meet downstream pipeline BTU specifications also provides a tailwind to our natural gas liquids volume expectations. Despite the volatile commodity price environment in recent days, ONEOK's financial flexibility, significant dividend coverage and investment-grade balance sheet position ONEOK well to weather these challenging market conditions," Spencer said.

"We recently completed a $1.75 billion debt offering enabling us to repay all of our commercial paper, leaving us with the full borrowing capacity available on our $2.5 billion credit agreement and approximately $600 million of cash on hand, demonstrating our strong financial position."

ONEOK has adjusted for planned capital expenditures and is suspending the following announced expansion projects:

  • The 100,000 barrel per day additional expansion of the West Texas LPG pipeline in the Permian Basin; and
  • The 200 million cubic feet per day (MMcf/d) expansion of the Demicks Lake natural gas processing facility, the Demicks Lake III project and related infrastructure in the Williston Basin.
  • Additionally, the scope of the Elk Creek Pipeline expansion will be reduced, with the ability to add pump stations incrementally to meet customer needs as necessary.

77彩票注册官网"The planning and work we have already completed allow us to quickly resume these suspended capital-growth projects when the environment improves and our customers require these services," said Spencer.

To contact the author, email bertie.taylor@rigzone.com.



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