US midstream services provider ONEOK has announced the expansion of the West Texas LPG pipeline, a 4184km long natural gas liquids (NGLs) pipeline, with an investment of about $295m.
The inter-state natural gas liquids (NGLs) West Texas LPG pipeline laid between Texas and New Mexico provides takeaway capacity for Permian Basin producers.
ONEOK said that the latest expansion project of the NGL pipeline is slated to be completed in the first quarter of 2020. The expanded pipeline capacity is backed by long-term dedicated NGL production from six third-party natural gas processing plants across the Permian Basin that are likely to produce a maximum of 60,000 barrels per day (bpd) of NGLs.
The expansion of the West Texas LPG pipeline will see the construction of four new pump stations, upgrades of two pump station and pipeline looping to boost its mainline capacity by 80,000bpd. It will also see construction of additional infrastructure to connect the pipeline system to ONEOK’s Arbuckle II Pipeline project, an NGL pipeline between Oklahoma and Texas, which is scheduled to be completed in the first quarter of 2020.
ONEOK president and CEO Terry K. Spencer said: “This second expansion of the West Texas LPG Pipeline system will serve continued growth in the Permian Basin and positions ONEOK for additional future expansion opportunities in the Permian.”
Previously, the West Texas LPG pipeline was expanded into the Delaware Basin with an investment of around $200m.
The 110,000 bpd pipeline lateral extension, which is part of the first expansion project of the pipeline system alongside the expansion of the existing mainline system, is currently under construction and is scheduled to be placed into service this month.
The West Texas LPG pipeline delivers transportation services of NGLs to the Mont Belvieu market center, which it procures from nearly 40 third-party natural gas processing plants in the Permian Basin.
In July, ONEOK made a deal with Martin Midstream Partners to buy out the latter’s 20% stake in West Texas LPG for $195m. Following the completion of the deal, the midstream services provider will get 100% ownership in the NGL pipeline.