ONEOK Inc. to build $1.4B natural gas pipeline

ONEOK Inc. on Thursday announced plans to build a $1.4 billion pipeline system to move natural gas liquids from eastern Montana to the Tulsa company's existing facilities near Bushton, Kansas.

The 900-mile Elk Creek Pipelineis expected operational by the end of 2019 and is designed to transport up to 240,000 barrels per day of unfractionated natural gas liquids.

The pipeline is projected to cost about $1.2 billion, with related infrastructure costs expected to total about $200 million.

The pipeline will be designed with the ability to be expanded to 400,000 barrels per day with additional pump facilities.

"The existing Bakken NGL and Overland Pass pipelines are operating at full capacity. Additional NGL takeaway capacity is critical to meeting the needs of producers who are increasing production and are required to meet natural gas capture targets in the Williston Basin," ONEOK CEO Terry K. Spencer said in a statement.

"The Elk Creek Pipeline will strengthen ONEOK's position in the high-production areas of the Bakken, Powder River and Denver-Julesburg regions and also provide additional reliability and redundancy on our NGL system."

The project is part of ONEOK's previously announced, broader effort to invest $3 billion to $3.5 billion in capitalgrowth projects.

To help pay for the project, ONEOK executives also said Thursday the company will offer up to 19 million shares of common stock in a public offering. At Thursday's closing price of $56.20 a share, the offering would be worth up to $1.07 billion.

The company said it would use about $450 million of the net proceeds from common stock issued in 2017.