ONEOK Partners, L.P. (OKS - Analyst Report) announced that it will invest $480–$680 million through the third quarter of 2016 to build two projects: the Bear Creek natural gas processing facility and allied infrastructure, and the Bronco natural gas processing facility and related operations.

The partnership will construct a natural gas processing facility called the Bear Creek natural gas processing plant and associated infrastructure. Once completed, the northwest Dunn County, ND-based facility will be able to process 80 million cubic feet per day (MMcf/d) of natural gas.

The total cost of the project is pegged at $265–$375 million, of which $130–$190 million will be allocated for the development of the natural gas processing plant and the rest will be utilized for building the natural gas and natural gas liquids NGL infrastructure. The project is expected to be completed in the second quarter of 2016.

The objective of the venture is to process natural gas produced from the Bakken Shale in the Williston Basin. ONEOK Partners continues to solidify its presence in the region and is building or has already built eight new facilities since 2010. In Aug 2014, the partnership completed a natural gas processing facility – the Garden Creek II plant – in eastern McKenzie County, ND. The partnership is in the middle of multiple ventures in Williston Basin, such as the Garden Creek III plant and the Lonesome Creek plant.

The completion of these ventures, including the Bear Creek plant, will allow the partnership to increase its natural gas processing capacity in the basin to around 1.2 billion cubic feet per day (Bcf/d) by the third quarter of 2016. ONEOK Partners is on track to fulfill the industry goal of reducing natural gas flaring to 5%–10% of the total production by the fourth quarter of 2020.

ONEOK Partners’ second project, a new natural gas processing facility – the Bronco plant – and allied infrastructure will be located in southern Campbell County, WY. The system will process 100-MMcf/d of natural gas sourced from the Powder River Basin.

The partnership will invest a total of $215–$305 million in the venture, including $130–$190 million for building the natural gas processing plant; $45–$60 million for developing a 65-mile, 10-inch NGL pipeline to join the Bronco Plant with its Bakken NGL Pipeline lateral and $40–$55 million for the construction of related natural gas systems. ONEOK Partners plans to complete the project in the third quarter of 2016.

The Bronco plant project will enable ONEOK Partners to expand its natural gas gathering and processing and NGL gathering operations in Wyoming. The scheduled completion of the project, along with the acquisition of the Sage Creek plant will help the partnership to meet increasing midstream service demand from its customers.

Taking into account the two latest projects, ONEOK Partners’ investments under the 2010–2016 capital growth program increased to $7.5–$8.2 billion from $7.0–$7.5 billion announced on the second-quarter 2014 earnings call. Currently, the partnership’s unannounced backlog stands at $3–$4 billion.

ONEOK Partners has well-diversified natural gas and NGL gathering and processing properties in several mineral-rich regions, including the Williston and Powder River basins and the Cana-Woodford Shale.

Exploration and production companies are actively drilling in these onshore locations to tap the vast reserves of natural resources. Within the time span of 2010 to 2016, ONEOK Partners plans to invest $4.2–$4.8 billion and $3.3–$3.4 billion for natural gas gathering and processing, and for NGL projects, respectively. The scheduled completion of these ventures will enable ONEOK Partners to cater to the increasing demand from upstream players, thereby boosting the partnership’s cash inflows.

In addition, multiple ventures will enable ONEOK Partners to improve its earnings before interest, taxes, depreciation, and amortization (EBITDA) and distributable cash flow and allow it to maximize unitholder value by increasing the distribution rate.

ONEOK Partners currently holds a Zacks Rank #3 (Hold). Other better-ranked stocks in the sector include Delek Logistics Partners, LP (DKL - Snapshot Report), Spectra Energy Partners, LP (SEP - Snapshot Report) and Sunoco Logistics Partners L.P. (SXL - Analyst Report). Each of these stocks carries a Zacks Rank #1 (Strong Buy).

Get the full Analyst Report on OKS - FREE

Get the full Analyst Report on SXL - FREE

Get the full Snapshot Report on SEP - FREE

Get the full Snapshot Report on DKL - FREE