Overland Pass Pipeline

There has been growing concern regarding NGL pipeline takeaway capacity out of the Williston Basin and the Niobrara — particularly the DJ Basin — over the past year, with one of the major pipes through those regions now running full. Finally, ONEOK has announced plans for the Elk Creek Pipeline, which will have an initial capacity of 240 Mb/d and be expandable to 400 Mb/d. The new pipe will transport mixed, unfractionated NGLs from eastern Montana to the Conway/Bushton fractionation hub in central Kansas, and provide long-term relief for a lot of Bakken, Powder River and Denver-Julesburg (DJ) Basin producers. But with an end-of-2019 in-service date, will the new capacity come soon enough to avert NGL takeaway constraints? Today, we discuss the Elk Creek project, the flows on existing NGL pipes to Conway/Bushton, and the growing significance of ethane as pipelines fill.

ONEOK Partners (OKS) own and operate one of the largest natural gas liquid (NGL) networks in the U.S. Like most midstream Master Limited Partnerships (MLPs), OKS’ stock price has dropped by more than 50% since mid-2014.  This despite the fact that most of ONEOK’s revenues are not directly impacted by lower crude and natural gas prices. Today we introduce the first of our new Spotlight reports (a joint venture between RBN and East Daley) available exclusively to Backstage Pass subscribers- that feature deep-dive fundamental analysis of select energy players’ operating assets. The first report features ONEOK and indicates that the company has a strong portfolio of fee based business fed by some of the most attractive producing basins in the U.S., particularly the Bakken which has the potential to amplify the company’s performance both to the upside and downside.