TULSA — ONEOK Partners LP is reaping the rewards of a $2 billion-plus capital investment program completed in late 2009.
“These projects significantly expanded our natural gas and natural gas liquids businesses and created volume growth in these areas that has resulted in increased earnings for the partnership and ONEOK by virtue of its general partnership interest and 42.8 percent ownership,” CEO John W. Gibson said.
ONEOK Partners ranked No. 8 on this year's Oklahoma Inc. list, with earnings per share up 44 percent over the previous year.
Gibson said ONEOK Partners, a master limited partnership subsidiary of ONEOK Inc., can continue to grow.
“In keeping with our recent history of growing from within, we've already announced plans to invest approximately $2.7 billion to $3.3 billion for additional growth projects in our natural gas gathering and processing and natural gas liquids business segments between now and 2014,” he said.
ONEOK Partners plans to spend up to $1.8 billion on projects in North Dakota's Bakken Shale, $1.2 billion for natural gas liquids infrastructure in the Mid-Continent and Gulf Coast regions and $295 million for projects in Oklahoma's Cana-Woodford and Granite Wash areas.
“We anticipate that the completion of these internally generated growth projects will result in increased volumes in our natural gas and natural gas liquids businesses and will enable us to continue to grow our business,” Gibson said. “As a result, we have projected an 18 percent to 22 percent annual earnings growth over the next three years as these projects are completed.”
He said ONEOK should continue to thrive even if the economy falters again.
“The majority of the services ONEOK Partners provides to natural gas producers and processors are non-discretionary, meaning that they must be performed if the commodities are to be produced and delivered to market,” Gibson said. “In addition, more than 60 percent of our net margin is fee-based, meaning that it is not directly related to changes in commodity prices or price differentials between market centers.
“For the margin that is exposed to commodity prices, ONEOK Partners mitigates that risk with a hedging strategy that locks in margins at favorable prices.”
He also said the projects being developed by ONEOK Partners are low risk endeavors.
“We have received firm commitments for our services that will enable us to deliver attractive returns on our investments as we continue to grow our business,” he said.