Lower prices for dry natural gas have led producers to areas with natural gas liquids and crude oil.
ONEOK Partners has benefited from higher transport volumes of natural gas liquids such as ethane and propane.
“Much of our completed and current investments are to build the necessary infrastructure for the growing supply of both natural gas and natural gas liquids,” Gibson said. “The value of these natural gas liquids is an important source of revenue to producers, particularly at a time when natural gas prices remain low due to abundant supply.”
Morningstar analyst Jason Stevens said ONEOK Partners has been on the right side of the natural gas liquids trade, in part because it has been able to exploit recent price differentials between natural gas liquids trading hubs in Kansas and Texas.
“While much of ONEOK's cash flows stem from fee-based transportation, gathering, processing and fractionation contracts, commodity price exposure has been the secret sauce for ONEOK for the past few years,” Stevens wrote in an August research update.
In Oklahoma, ONEOK Partners announced plans earlier this year to build a new natural gas processing plant and related infrastructure in the Cana-Woodford Shale. That includes a 200 million cubic feet per day natural gas processing facility in Canadian County. The plant, which will cost about $190 million, is expected to be operational by early 2014.
“This new infrastructure is necessary to accommodate increased production of NGL-rich natural gas in the Cana-Woodford Shale where we already have existing natural gas and natural gas liquids pipelines,” Gibson said. “We are also participating in the Mississippian Lime play with our existing natural gas gathering and processing and NGL assets in the area.”