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ONEOK Partners continues to build on infrastructure investments

The Tulsa-based master limited partnership drives strong income growth from higher volumes of natural gas liquids transportation and announced its first crude oil pipeline to serve the fast-growing Bakken field in North Dakota.
by Paul Monies Modified: November 12, 2012 at 10:36 am •  Published: November 11, 2012

Past investments in pipeline and gathering infrastructure continues to drive growth at ONEOK Partners LP, which landed at No. 5 in this year's list of best-performing public companies in Oklahoma.

But the partnership isn't resting on its laurels. ONEOK Partners plans to spend between $5.7 billion and $6.6 billion between now and 2015 on infrastructure related to natural gas, natural gas liquids and crude oil.

“These projects, located primarily in the Bakken Shale in the Williston Basin, the Mid-Continent and the Texas Gulf Coast, enable us to continue to meet the needs of producers and customers, and deliver attractive returns to investors,” said John W. Gibson, chairman and chief executive officer of ONEOK Partners and ONEOK Inc.

The largest of those projects, the Bakken Crude Express Pipeline, is a 1,300-mile crude oil pipeline with the capacity to transport up to 200,000 barrels of oil per day. The pipeline, ONEOK Partners' first foray into crude oil transportation, will take light-sweet crude oil from North Dakota and Montana to the crude oil hub in Cushing. After regulatory approvals and permits, the pipeline is expected to begin construction in early 2014 and be finished by mid-2015, Gibson said.

As a master limited partnership, ONEOK Partners offers an attractive place for investors to manage risk amid volatile energy commodity markets. Unlike corporations, master limited partnerships pass along a higher percentage of their income to investors in the form of cash distributions, Gibson said.

ONEOK Partners ranked second among Oklahoma companies for its one-year total return of 32 percent, as tabulated by S&P Capital IQ for The Oklahoman.

Annual distributions paid per partnership unit increased steadily in the last five years, from $1.99 per unit in 2007 to $2.32 in 2011. That's expected to increase to $2.59 per unit in 2012, according to the company's latest guidance.

“In a still somewhat uncertain economic environment, master limited partnerships offer investors a diverse investment opportunity,” Gibson said. “Companies like ONEOK Partners have performed well over the past few years, relative to the S&P 500, with potential to grow.”

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by Paul Monies
Energy Reporter
Paul Monies is an energy reporter for The Oklahoman. He has worked at newspapers in Texas and Missouri and most recently was a data journalist for USA Today in the Washington D.C. area. Monies also spent nine years as a business reporter and...
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