ONEOK, Inc. has reported higher profit for the fourth quarter and full year 2014 but is suspending work on natural-gas processing plants in three states because of lower commodity prices, a decline in drilling and the anticipated impact on natural-gas production.
The midstream company said on Monday that it was halting capital expenditures for:
- The Demicks Lake natural gas processing plant and related infrastructure in the Williston Basin in North Dakota;
- The Knox natural gas processing plant and related infrastructure in the Mid-Continent region in Oklahoma; and
- The Bronco natural gas processing plant and related infrastructure in the Powder River Basin in Wyoming.
"ONEOK Partners expects to resume suspended capital-growth projects and update associated completion dates as soon as market conditions improve," commented Terry K. Spencer, president and CEO of ONEOK. "The planning and development the partnership has already completed puts it in a position to quickly resume these projects when the environment improves and its customers require these services."
Operations at the three plants were previously planned to start in 2016.
The Demicks Lake plant and associated infrastructure will cost approximately $475-$670 million to build and will have a capacity of 200 million cubic feet/day (200mcf/day).
The Knox plant, also with a capacity of 200mcf/day, is expected to cost around $240-$470 million and the smaller Bronco plant, with a capacity of 100mcf/day, will cost approximately $130-$200 million to build.