Oneok is all set to take full ownership in the West Texas LPG Pipeline by buying out Martin Midstream Partners’ stake of 20% for a sum of $195m.


Image: Oneok to be the sole owner of the West Texas LPG Pipeline. Photo: courtesy of Jordan MacDonald from Broken Arrow, Oklahoma, U.S.A./

The West Texas LPG Pipeline is a 4184km long inter-state natural gas liquids (NGLs) pipeline system between Texas and New Mexico, which offers takeaway capacity to Permian Basin producers.

In December 2014, Oneok acquired 80% stake in the West Texas LPG Pipeline from affiliates of Chevron along with 100% stake in the Mesquite Pipeline for a price of nearly $800m.

Oneok president and CEO Terry K. Spencer said: “Acquiring the remaining interest in West Texas LPG is a strategic step in our broader Permian Basin strategy.

“A wholly owned West Texas LPG allows Oneok to more effectively integrate it into the rest of our extensive NGL system, positioning us for future expansion opportunities currently under development.”

Oneok, which expects to fund the acquisition with cash on hand, said that deal is likely to be closed by the end of this month.

The West Texas LPG Pipeline delivers transportation services of NGLs to the Mont Belvieu market center. It procures the NGLs from about 40 third-party natural gas processing plants in the Permian Basin.

In last October, Oneok and Martin Midstream Partners announced plans to invest about $200m to expand the West Texas LPG Pipeline into the Delaware Basin. The expansion project of the interstate NGL pipeline system is due to be completed in the third quarter of this year.

As part of the pipeline extension to the Delaware Basin, Oneok and Martin Midstream Partners then agreed to build a 16inch lateral pipeline of nearly 120km length that will initially support a capacity of 110,000bpd.

Last month, Oneok revealed its intentions to expand its natural gas pipeline infrastructure in the Permian Basin and Oklahoma by up to a total of 1.7 billion cubic feet per day (Bcf/d). The expansion will be undertaken for multiple pipelines to create additional natural gas takeaway capacity, said the US midstream service provider.