Pipeline operator ONEOK greenlights new Delaware Basin gas plant

Midstream company ONEOK announced on Tuesday that it had made a final decision to invest in a new natural-gas processing plant in Delaware Basin. This will expand its footprint in America's top shale gas field, as gas volumes continue to surge.

The company has increased its presence in Permian Basin, which includes the Delaware Basin, through strategic moves, such as acquiring NGP XI Midstream Holdings stake in their Delaware Basin Joint Venture, buying a Gulf Coast NGL Pipeline System and taking over Medallion Midstream, EnLink Midstream, and Medallion Midstream.

Sheridan Swords, Chief Commercial Officer of the company, said in a call following earnings that "the Permian basin continues to be an important area for strategic growth."

The company stated that the new Bighorn plant would have a processing capacity of 300 million cubic feet (mmcfpd), and will be able to treat gas with high carbon dioxide levels.

The cost of the facility and its associated treatment system is expected to be around $365 million. Service will begin in mid-2027.

Swords stated that the plant will increase ONEOK’s processing capacity of the Delaware Basin (between Texas and New Mexico) to 1.1 billion cubic foot per day from 700 mmcfpd at present.

LSEG data show that the company reported a core loss of $1.98bn on Monday, which was below analysts' expectations, of $2.01bn.

The company also expects EBITDA to grow by mid-to-upper single digits, as opposed to its previous forecast of 10%.

The shares of the company that transports crude oil, refined products, natural gases, and natural gas liquids were down by more than 5% during afternoon trading. (Reporting and editing by Shilpi Mahumdar in Bengaluru, with Vallari Srivastava from Bengaluru)

(source: Reuters)