In attempts to expand its ONEOK WesTex Transmission intrastate natural gas pipeline, ONEOK Partners, L.P., said it would invest up to $100 million to be able to handle a capacity of 260 million cubic feet per day of natural gas. According to the release, the project is set to be complete by the first quarter of 2017, which will significantly help improve the natural gas transportation in the Permian Basin in West Texas.
Terry K. Spencer, CEO and president of ONEOK Partners, explained how the extended WesTex transmission line will help out other pipeline projects in the company. Additionally, there are two new compressor stations and upgrades that will go along with the expansions to three of the already existing compressor stations. According to the release, the company plans to add roughly 38,800 horsepower to these stations to move the natural gas more efficiently.
"This expansion project is complementary to our recently announced Roadrunner Gas Transmission pipeline project," said Spencer. "These integrated assets will provide markets in Mexico access to upstream supply basins in West Texas and the Mid-Continent, which adds location and price diversity to their supply mix."
Mexican national utility agrees to subscribe to firm capacity
Through firm take-or-pay agreements, approximately 90 percent of the total capacity was called for in the open season process. This period lasted from Feb. 2 to Feb. 27, 2015. Now, the Mexican national electricity utility, The Comision Federal de Electricidad, will be the anchor shipper. Additionally, the CFE agreed to subscribe to firm capacity for a 25-year contract.
"Through the Roadrunner project, we are pleased to have developed a strategic relationship with the CFE," Spencer said in a statement. "This expansion of ONEOK's WesTex pipeline system will deepen this relationship while adding an additional source of fee-based earnings to ONEOK Partners."
At the beginning of the month, ONEOK Partners collected about $277 million through its at-the-market equity program, MarketWatch reported. This was gathered in the first half of 2015 and common units were sold throughout the year. This helped preserve the 2 percent general interest from the net proceeds.
According to the source, the company is one of the biggest master limited partnerships in the U.S., which can be publicly traded. As for the pipeline, the company expects massive improvements across its 2,227 miles of natural gas pipelines.