Big Money Flowing In Midstreamture

It was the summer of spending in the midstream space, where dollars continued to flow as billions were committed to creating and improving infrastructure. Pipelines are being expanded, replaced and created in plays throughout the country, while more millions will be spent to increase storage space.

Helping lead the charge is Oneok Partners LP (Oneok), which announced plans July 26 to invest upward of $1 billion in midstream infrastructure. Between now and 2014, the company plans to spend between $980 million and $1.1 billion to increase its Bakken Shale footprint, while adding assets to Mont Belvieu.

“These projects reflect our continuing commitment to provide natural gas processing, and NGL [natural gas liquid] fractionation and transportation capacity to producers actively developing shale plays within our operating footprint,” Pierce H. Norton, Oneok’s executive vice president and chief operating officer, said in a public statement.

Oneok will build a new 75,000 barrel (bbl.) per day NGL fractionator and related infrastructure in Mont Belvieu. It will build a 40,000 bbl. per day ethane and propane splitter there, too.

As well, Oneok will more than double capacity on the Bakken NGL pipeline, from an initial capacity of 60,000 bbl. per day to 135,000 bbl. per day. It will also build a new 100 million cubic feet per day natural gas processing facility, Garden II plant, in McKenzie County, North Dakota.

In another major boost to the midstream sector, NiSource Inc.’s Midstream and Minerals Group LLC announced a joint venture with affiliates of Hilcorp Energy Company. The venture will see hundreds of millions of dollars invested into the midstream.

The companies will construct new gathering pipeline infrastructure and NGL processing facilities to boost gas production in the Utica Shale region in northeast Ohio and southern Pennsylvania. The first $300 million phase of the venture’s investment program is planned for late 2012.

The companies will engage in a separate joint venture to develop hydrocarbon potential in the Utica and Point Pleasant Shale formation in Northeast Ohio and western Pennsylvania.