TULSA, Okla., July 30, 2015 /PRNewswire/ -- ONEOK
Partners, L.P. (NYSE: OKS) today announced plans to invest
$70 million to $100 million to expand
its ONEOK WesTex Transmission (ONEOK WesTex) intrastate natural gas
pipeline system by increasing its throughput capacity by 260
million cubic feet per day (MMcf/d) of natural gas by the first
quarter 2017.
"This expansion project is complementary to our recently
announced Roadrunner Gas Transmission pipeline project. These
integrated assets will provide markets in Mexico access to upstream supply basins in
West Texas and the Mid-Continent,
which adds location and price diversity to their supply mix," said
Terry K. Spencer, president and
chief executive officer of ONEOK Partners.
The ONEOK WesTex expansion project, located in the Texas Panhandle and the Permian Basin in
West Texas, includes the
construction of two new compressor stations and upgrades or
expansions to three existing compressor stations. Total added
horsepower is expected to be approximately 38,800. ONEOK
WesTex, which had qualifying open season bids in excess of 500
MMcf/d, will utilize 240 MMcf/d of existing capacity and create
additional capacity by expanding its system by 260 MMcf/d. Ninety
percent of this total available capacity was subscribed with firm
take-or-pay agreements through an open season process that ran from
Feb. 2, 2015, to Feb. 27, 2015.
The Comision Federal de Electricidad (CFE), Mexico's national electric utility, has agreed
to be the anchor shipper and has subscribed to firm capacity
(take-or-pay) for a 25-year term. CFE generates, distributes and
markets electric power for almost 35.3 million customers in
Mexico. According to the CFE, this
long-term transportation position supports CFE's strategy to bring
natural gas to Mexico, which is a
cleaner and less expensive fuel alternative for power generation in
Mexico.
"Through the Roadrunner project, we are pleased to have
developed a strategic relationship with the CFE. This expansion of
ONEOK's WesTex pipeline system will deepen this relationship while
adding an additional source of fee-based earnings to ONEOK
Partners," continued Spencer.
The capacity is available in two phases. The first phase of
capacity is approximately 100 MMcf/d and will be available in the
first quarter 2016. The second phase of capacity is approximately
400 MMcf/d and will be available in the first quarter 2017.
ONEOK WesTex Transmission is an intrastate natural gas pipeline
system operating within Texas,
consisting of approximately 2,227 miles of pipeline. This project
is subject to receipt of customary governmental approvals.
The Roadrunner Gas Transmission pipeline project is a 50-50
joint venture with a subsidiary of Fermaca Infrastructure B.V.
(Fermaca), a Mexico City-based
natural gas infrastructure company that will transport natural gas
from the Permian Basin in West
Texas to Mexico. It
includes approximately 200 miles of new, 30-inch diameter pipeline
currently designed to transport up to 640 million cubic feet per
day (MMcf/d) of natural gas, with up to 570 MMcf/d to be
transported to Mexico's growing
markets. The pipeline will extend from ONEOK WesTex's natural gas
pipeline system at Coyanosa,
Texas, west to a new international border-crossing
connection at the U.S. and Mexico
border near San Elizario,
Texas.
This project is expected to generate an adjusted EBITDA multiple
of five to seven times. The incremental earnings from this
project are expected to increase distributable cash flow and value
to unitholders supporting future cash distributions.
NON-GAAP (GENERALLY ACCEPTED ACCOUNTING PRINCIPLES) FINANCIAL
MEASURES:
Adjusted EBITDA and distributable cash flow (DCF) levels are
financial measures not defined by the generally accepted accounting
principles in the United States
(GAAP). ONEOK Partners has disclosed in this news
release anticipated adjusted EBITDA and DCF levels that are
non-GAAP financial measures. Adjusted EBITDA and DCF are used
as a measure of the partnership's financial performance.
Adjusted EBITDA is defined as net income adjusted for interest
expense, depreciation and amortization, income taxes and allowance
for equity funds used during construction and certain other
items. DCF is defined as adjusted EBITDA, computed as
described above, less interest expense, maintenance capital
expenditures and equity earnings from investments, adjusted for
cash distributions received and certain other items.
The partnership believes the non-GAAP financial measures
described above are useful to investors because these measurements
are used by many companies in its industry to measure financial
performance and are commonly employed by financial analysts and
others to evaluate the financial performance of the partnership and
to compare the financial performance of the partnership with the
performance of other publicly traded partnerships within its
industry.
The GAAP measure most directly comparable to adjusted EBITDA and
DCF is net income. Adjusted EBITDA and DCF should not be considered
an alternative to net income, earnings per unit or any other
measure of financial performance presented in accordance with
GAAP.
These non-GAAP financial measures exclude some, but not all,
items that affect net income. Additionally, these calculations may
not be comparable with similarly titled measures of other
companies. Furthermore, these non-GAAP measures should not be
viewed as indicative of the actual amount of cash that is available
for distributions or that is planned to be distributed for a given
period nor do they equate to available cash as defined in the
partnership agreement.
This news release references forward-looking estimates of annual
adjusted EBITDA and adjusted EBITDA investment multiples projected
to be generated by this project. A reconciliation of estimated
adjusted EBITDA to GAAP net income is not provided because the GAAP
net income generated by the project is not available without
unreasonable efforts.
ONEOK Partners, L.P. (pronounced ONE-OAK) (NYSE: OKS) is one of
the largest publicly traded master limited partnerships in
the United States and owns one of
the nation's premier natural gas liquids (NGL) systems, connecting
NGL supply in the Mid-Continent, Permian and Rocky Mountain regions
with key market centers and is a leader in the gathering,
processing, storage and transportation of natural gas in the U.S.
Its general partner is a wholly owned subsidiary of ONEOK, Inc.
(NYSE: OKE), a pure-play publicly traded general partner, which
owns 36.8 percent of the overall partnership interest, as of
June 30, 2015.
For more information, visit the website at
www.oneokpartners.com.
For the latest news about ONEOK Partners, follow us on Twitter
@ONEOKPartners.
Some of the statements contained or incorporated in this news
release are forward-looking statements as defined under federal
securities laws. The forward-looking statements relate to the
proposed construction and capacity of the Roadrunner project and
related infrastructure, the schedule and costs to complete the
proposed project and related infrastructure, and potential future
cross-border development opportunities related to the proposed
project. These forward-looking statements are made in
reliance on the safe-harbor protections provided under federal
securities legislation and other applicable laws.
Forward-looking statements include the items identified in the
preceding paragraph, the information concerning possible or assumed
future results of our operations and other statements contained or
incorporated in this news release identified by words such as
"anticipate," "estimate," "expect," "project," "intend," "plan,"
"believe," "should," "goal," "forecast," "guidance," "could,"
"may," "potential," "scheduled," and other words and terms of
similar meaning.
You should not place undue reliance on forward-looking
statements. Known and unknown risks, uncertainties and other
factors may cause our actual results, performance or achievements
to be materially different from any future results, performance or
achievements expressed or implied by forward-looking statements.
Those factors may affect our operations, markets, products,
services and prices. These and other risks are described in greater
detail in Item 1A, Risk Factors, in our most recent Annual Report
on Form 10-K and in our other filings that we make with the
Securities and Exchange Commission (SEC), which are available via
the SEC's website at www.sec.gov. All forward-looking statements
attributable to us or persons acting on our behalf are expressly
qualified in their entirety by these factors. Any such
forward-looking statement speaks only as of the date on which such
statement is made, and, other than as required under securities
laws, we undertake no obligation to update publicly any
forward-looking statement whether as a result of new information,
subsequent events or change in circumstances, expectations or
otherwise.
Analyst
Contact:
|
T.D.
Eureste
|
|
918-588-7167
|
Media
Contact:
|
Brad
Borror
|
|
918-588-7582
|
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SOURCE ONEOK Partners, L.P.