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Oneok (NYSE:OKE) still considers the construction of a liquefied petroleum gas export terminal on the Gulf Coast as a high priority, even as it pursues shorter-term synergies created by its recent acquisition of Magellan Midstream Partners, company executives said on Wednesday’s post-earnings conference call.
“The export dock isn’t further down the list,” Oneok (OKE) VP Sheridan Swords said during the call, as reported by the Oil Price Information System, “but it’s a much longer-term project vs. others in the synergy category.”
Execs on the call said the Magellan acquisition will provide Oneok (OKE) with greater prospects to export crude, refined products, LPG and propane, and opportunities such as batching, blending, bundling and storage optimization providing potential upside in the next 1-4 years, according to OPIS.
OPIS reported Oneok (OKE) also said the $520M expansion of the remaining loop of the West Texas NGL pipeline to connect with its Arbuckle pipeline and increase capacity out of the Permian Basin is expected to start operations in Q1 2025, giving the company the option to use its legacy system for NGL, refined products or crude oil transportation service.
Oneok’s (OKE) contracting success in the Permian Basin is driving the project, officials said, according to OPIS; the company has long-term contracts in place for its nine Permian Basin plants, and anticipates very favorable returns, Swords said on the call.
OPIS also said Oneok (OKE) foresees a final investment decision by year-end on its proposed Saguaro Connector Pipeline, which would originate at the Waha hub, then run west to connect at the U.S.-Mexico border to a pipeline under development in Mexico for planned delivery to a gas export facility on Mexico’s west coast.
Oneok (OKE) ended Wednesday’s trading -1% after reporting a 5% Y/Y increase in Q3 net earnings to $454M and raised full-year guidance midpoints for net earnings and adjusted EBITDA by $120M and $125M, respectively.
