ONEOK, Inc. delivers energy products and services vital to an advancing world. The company is a leading midstream service provider of gathering, processing, fractionation, transportation, storage and marine export services. As one of the largest diversified energy infrastructure companies in North America, the company is delivering energy that makes a difference in the lives of people in the U.S. and around the world. Through its more than 50,000-mile pipeline network, the company transports the...
ONEOK, Inc. delivers energy products and services vital to an advancing world. The company is a leading midstream service provider of gathering, processing, fractionation, transportation, storage and marine export services. As one of the largest diversified energy infrastructure companies in North America, the company is delivering energy that makes a difference in the lives of people in the U.S. and around the world. Through its more than 50,000-mile pipeline network, the company transports the natural gas, NGLs, Refined Products and crude oil that help meet domestic and international energy demand, contribute to energy security and provide safe, reliable and responsible energy solutions needed.
Natural Gas - In its Natural Gas Gathering and Processing segment, the company completed an expansion of the injection capabilities of its Oklahoma natural gas storage facilities, which allowed it to utilize and subscribe an additional 4 Bcf of existing storage capacity, which is fully subscribed through 2027 and 90% subscribed through 2029. In addition, the company completed the electrification of certain compression assets on Viking to maintain reliability of its operations while lowering its Scope 1 emissions from this equipment. Viking is seeking to recover its investment in the project through a proposed increase in rates filed in July 2023.
In February 2024, the FERC approved its Saguaro Connector Pipeline, L.L.C.'s Presidential Permit application to construct and operate new international border-crossing facilities at the U.S. and Mexico border. The proposed border facilities would connect upstream with a potential intrastate pipeline, the Saguaro Connector pipeline. Additionally, the proposed border facilities would connect at the international boundary with a new pipeline under development in Mexico for delivery to a liquefied natural gas export facility on the west coast of Mexico. The final investment decision on the Saguaro Connector pipeline is expected by mid-year 2024.
NGLs - In its Natural Gas Liquids segment, the company benefited from increased volumes in 2023, due primarily to increased production in the Permian Basin and Rocky Mountain region.
In addition to construction of its MB-6 fractionator, activities are underway to complete the looping of the West Texas NGL pipeline, which will more than double the company's NGL capacity out of the Permian Basin. The full loop is expected to be in service in the first quarter of 2025. The company also has begun initial work, primarily on long-lead-time components, towards expanding the Elk Creek pipeline to 435 MBbl/d to provide capacity for growing volumes in the Rocky Mountain region, which will bring its total pipeline capacity out of the Rocky Mountain region to 575 MBbl/d. The Elk Creek pipeline expansion is expected to be in service in the first quarter of 2025.
Refined Products and Crude - The company's 2023 results include the period from September 25, 2023, to December 31, 2023.
Strategy
The company commits to developing processes to drive a zero-incident culture for the well-being of its employees, contractors and communities. Safety and environmental responsibility continue to be primary areas of focus for it, and its emphasis on safety has produced improving trends in the key indicators it tracks. The company strives to be an employer of choice and continue to focus on attracting, selecting and retaining talent, advancing an inclusive, diverse and engaged culture and developing individuals and leaders.
Segments
The company operates through four segments: Natural Gas Gathering and Processing; Natural Gas Liquids; Natural Gas Pipelines; and Refined Products and Crude.
Natural Gas Gathering and Processing segment
In its Natural Gas Gathering and Processing segment, raw natural gas is typically gathered at the wellhead, compressed and transported through pipelines to the company's processing facilities. Most raw natural gas produced at the wellhead also contains a mixture of NGL components, including ethane, propane, iso-butane, normal butane and natural gasoline. Gathered wellhead natural gas is directed to the company's processing plants to remove NGLs resulting in residue natural gas (primarily methane). Residue natural gas is then recompressed and delivered to natural gas pipelines, storage facilities and end users. The NGLs separated from the raw natural gas are delivered through NGL pipelines to fractionation facilities for further processing. Some of the heavier NGLs may separate upstream of processing and fractionation and are sold as condensate at NGL or crude oil markets. The company's Natural Gas Gathering and Processing segment provides these midstream services to producers in North Dakota, Montana, Wyoming, Kansas and Oklahoma.
Rocky Mountain Region - The Williston Basin is located in portions of North Dakota and Montana and includes the oil-producing, NGL-rich Bakken Shale and Three Forks formations. The company has more than 3 million dedicated acres in the Williston Basin.
The Powder River Basin is primarily located in Wyoming, which includes the NGL-rich Niobrara, Frontier, Turner and Mowry formations where the company provides gathering and processing services to customers in the eastern portion of the state.
Mid-Continent region - The Mid-Continent region includes the gas and oil-producing Anadarko Basin, which includes the NGL-rich SCOOP and STACK areas, including the Cana-Woodford Shale, Woodford Shale, Springer Shale, Meramec, Granite Wash and Mississippian Lime formations of Oklahoma and the Hugoton Basin in Kansas. The company has more than 600,000 dedicated acres in the Anadarko Basin.
Property - The company's Natural Gas Gathering and Processing segment includes the following assets, which are wholly owned, except where noted:
17,400 miles of natural gas gathering pipelines;
14 natural gas processing plants with 1.9 Bcf/d of processing capacity in the Rocky Mountain region, and nine natural gas processing plants with 0.9 Bcf/d of processing capacity in the Mid-Continent region, and up to 150 MMcf/d of processing capacity in the Mid-Continent region through a long-term processing services agreement with an unaffiliated third party; and
14 MBbl/d of NGL fractionation capacity and 26 MBbl/d of de-ethanizer capacity at various natural gas processing plants. The utilization rates for the company's natural gas processing plants were 77% for 2023.
Government Regulation
The company transports residue natural gas from certain of its natural gas processing plants to interstate pipelines in accordance with Section 311(a) of the Natural Gas Policy Act. Oklahoma, Kansas, Wyoming, Montana and North Dakota also have statutes regulating, to varying degrees, the gathering of natural gas in those states.
Natural Gas Liquids segment
In its Natural Gas Liquids segment, NGLs that are extracted at natural gas processing plants, both third-party and the company's own, are gathered by its NGL gathering pipelines. Gathered NGLs are directed to the company's downstream fractionators in the Mid-Continent and Gulf Coast regions to be separated into Purity NGLs. Purity NGLs are stored or distributed to the company's customers, such as petrochemical companies, propane distributors, heating fuel users, ethanol producers, refineries and exporters.
The company owns and operates facilities primarily in Oklahoma, Kansas, Texas, New Mexico and the Rocky Mountain region, which includes the Williston, Powder River and DJ Basins. The company provides midstream services to producers of NGLs and deliver those products to the two primary market centers: one in the Mid-Continent in Conway, Kansas, and the other in the Gulf Coast in Mont Belvieu, Texas. The company owns or has an ownership interest in FERC-regulated NGL gathering and distribution pipelines in Oklahoma, Kansas, Texas, New Mexico, Montana, North Dakota, Wyoming and Colorado, and terminal and storage facilities in Kansas, Nebraska, Iowa and Illinois. The company has a 50% ownership interest in Overland Pass, which operates an interstate NGL pipeline originating in Wyoming and Colorado and terminating in Kansas. The majority of the pipeline-connected natural gas processing plants in the Williston Basin, Oklahoma, Kansas and the Texas Panhandle are connected to the company's NGL gathering systems. The company leases rail cars and own and operate truck- and rail-loading and -unloading facilities connected to its NGL fractionation, storage and pipeline assets. The company also owns FERC-regulated NGL distribution pipelines in Kansas, Nebraska, Iowa, Illinois and Indiana that connect its Mid-Continent assets with Midwest markets, including Chicago, Illinois. A portion of its ONEOK North System transports Refined Products, including unleaded gasoline and diesel.
Property - The company's Natural Gas Liquids segment includes the following assets, which are wholly owned, except where noted:
9,160 miles of gathering pipelines;
4,350 miles of distribution pipelines;
eight NGL fractionators with combined operating capacity of 835 MBbl/d (includes interests in its proportional share of operating capacity), including 310 MBbl/d in the Mid-Continent region and 525 MBbl/d in the Gulf Coast region, which are 98% utilized;
one isomerization unit with operating capacity of 10 MBbl/d;
one ethane/propane splitter with operating capacity of 40 MBbl/d;
six NGL storage facilities with operating storage capacity of 30 MMBbl; and
eight Purity NGLs terminals.
In addition, the company has access to 5 MMBbl of combined NGL storage capacity at facilities in Kansas and Texas and 60 MBbl/d of NGL fractionation capacity in the Gulf Coast through service agreements.
The operating capacity of its pipelines varies depending on pipeline diameter, product composition and segment of the system. The company is in the process of constructing its 125 MBbl/d MB-6 NGL fractionator in Mont Belvieu, Texas, the full looping of its West Texas NGL pipeline and expansion of its Elk Creek pipeline.
Unconsolidated Affiliates - The company has a 50% ownership interest in Overland Pass, which operates an interstate NGL pipeline system extending 760 miles, originating in Wyoming and Colorado and terminating in Kansas.
Government Regulation - The operations and revenues of the company's NGL pipelines are regulated by various state and federal government agencies. The company's interstate NGL pipelines are regulated under the Interstate Commerce Act, which gives the FERC jurisdiction to regulate the terms and conditions of service, rates, including depreciation and amortization policies, and initiation of service. In Oklahoma, Kansas and Texas, certain aspects of the company's intrastate NGL pipelines that provide common carrier service are subject to the jurisdiction of the OCC, KCC and RRC, respectively.
Natural Gas Pipelines
Overview of Operations - In its Natural Gas Pipelines segment, the company receives residue natural gas from third parties and its own natural gas processing plants and interconnecting pipelines. Residue natural gas is transported or stored for end users, such as large industrial customers, natural gas and electric utilities serving commercial and residential consumers and can ultimately reach international markets through liquified natural gas exports and cross border pipelines.
Intrastate Pipelines and Storage - The company's intrastate natural gas pipeline and storage assets are located in Oklahoma, Texas and Kansas. The company's intrastate pipeline and storage companies primarily include:
ONEOK Gas Transportation, which transports natural gas throughout the state of Oklahoma and has access to the major natural gas production areas in the Mid-Continent region, which include the SCOOP and STACK areas and the Cana-Woodford Shale, Woodford Shale, Springer Shale, Meramec, Granite Wash and Mississippian Lime formations. ONEOK Gas Transportation is connected to the company's ONEOK Gas Storage facilities in Oklahoma, which provide 50 Bcf of working gas storage capacity; and
ONEOK WesTex Transmission, which transports natural gas throughout the western portion of the state of Texas, including the Waha Hub area where other pipelines may be accessed for transportation to western markets, exports to Mexico, several markets to the southeast along the Gulf Coast, including the Houston Ship Channel and the Mid-Continent market to the north. It has access to major natural gas producing formations in the Texas Panhandle, including the Granite Wash formation and Delaware and Midland Basins in the Permian Basin. ONEOK WesTex Transmission is connected to the company's ONEOK Texas Gas Storage facilities, which provide 5 Bcf of working gas storage capacity.
Interstate Pipelines - The company's interstate pipelines are regulated by the FERC and are located in North Dakota, Minnesota, Wisconsin, Illinois, Indiana, Kentucky, Tennessee, Oklahoma, Texas and New Mexico. The company's interstate pipeline companies include:
Guardian, which interconnects with several pipelines at the Chicago Hub near Joliet, Illinois, and with local natural gas distribution and electric generation companies in Wisconsin;
Midwestern Gas Transmission, which is a bidirectional system that interconnects with Tennessee Gas Transmission Company's pipeline near Portland, Tennessee, and with multiple interstate pipelines that have access to both the Utica Shale and the Marcellus Shale, and multiple interstate pipelines at the Chicago Hub near Joliet, Illinois;
Viking, which is a bidirectional system that interconnects with TC Energy Corporation's Canadian Mainline System at the United States border near Emerson, Canada, and ANR Pipeline Company near Marshfield, Wisconsin; and
OkTex Pipeline, which has interconnections with several pipelines in Oklahoma, Texas and New Mexico.
Property - The company's Natural Gas Pipelines segment includes the following wholly owned assets:
5,100 miles of state-regulated intrastate transmission pipelines with transportation capacity of 4.5 Bcf/d;
1,500 miles of Federal Energy Regulatory Commission (FERC)-regulated interstate natural gas pipelines with 3.7 Billion cubic feet per day (Bcf/d) of transportation capacity; and
six underground natural gas storage facilities with 57.4 Bcf of total active working natural gas storage capacity.
The company's storage includes two underground natural gas storage facilities in Oklahoma, two underground natural gas storage facilities in Kansas and two underground natural gas storage facilities in Texas. In 2023, the company completed an expansion of its injection capabilities of its Oklahoma natural gas storage facilities which allowed it to utilize and subscribe an additional 4 Bcf of its existing storage capacity.
The company is reactivating previously idled storage facilities with 3 Bcf of working gas storage capacity in Texas. The company is also further expanding its injection capabilities in Oklahoma to allow it to subscribe additional firm storage capacity.
The company's transportation earnings are primarily fee-based from the following types of services:
Firm Service - Customers reserve a fixed quantity of pipeline capacity for a specified period of time, which obligates the customer to pay regardless of usage. Under this type of contract, the customer pays a monthly fixed fee and incremental fees, known as commodity charges, which are based on the actual volumes of natural gas they transport or store. Under the firm service contract, the customer generally is guaranteed access to the capacity they reserve.
Interruptible Service - Under interruptible service transportation agreements, the customer may utilize available capacity after firm service requests are satisfied. The customer is not guaranteed use of the company's pipelines unless excess capacity is available.
The company's regulated natural gas transportation services contracts are based upon rates stated in the respective tariffs, which have generally been established through shipper specific negotiation, discounts and negotiated settlements. The rates are filed with FERC or the appropriate state jurisdictional agencies. In addition, customers typically are assessed fees, such as a commodity charge, and the company may retain a percentage of natural gas in-kind for its compression services.
The company's storage earnings are primarily fee-based from the following types of services:
Firm Service - Customers reserve a specific quantity of storage capacity, including injection and withdrawal rights, and generally pay fixed fees based on the quantity of capacity reserved plus an injection and withdrawal fee based on actual usage. The company's firm storage contracts typically have terms longer than one year.
Park-and-Loan Service - An interruptible storage service offered to customers providing the ability to park (inject) or loan (withdraw) natural gas into or out of its storage, typically for monthly or seasonal terms. Customers reserve the right to park or loan natural gas based on a specified quantity, including injection and withdrawal rights when capacity is available.
Unconsolidated Affiliates - The company's Natural Gas Pipelines segment includes the following unconsolidated affiliates:
50% ownership interest in Northern Border, which owns a FERC-regulated interstate pipeline that transports natural gas from the Montana-Saskatchewan border near Port of Morgan, Montana, and the Williston Basin in North Dakota to a terminus near North Hayden, Indiana.
50% ownership interest in Roadrunner, a bidirectional pipeline, which has the capacity to transport 570 Million cubic feet per day (MMcf/d) of natural gas from the Permian Basin in West Texas to the Mexican border near El Paso, Texas, and has capacity to transport approximately 1.0 Bcf/d of natural gas from the Delaware Basin to the Waha Hub area. The company is the operator of Roadrunner.
In February 2024, the FERC approved the company's Saguaro Connector Pipeline, L.L.C.'s Presidential Permit application to construct and operate new international border-crossing facilities at the U.S. and Mexico border. The proposed border facilities would connect upstream with a potential intrastate pipeline, the Saguaro Connector pipeline. Additionally, the proposed border facilities would connect at the international boundary with a new pipeline under development in Mexico for delivery to a liquefied natural gas export facility on the west coast of Mexico. The final investment decision on the Saguaro Connector pipeline is expected by mid-year 2024.
Government Regulation - Interstate - The company's interstate natural gas pipelines are regulated under the Natural Gas Act, which gives the FERC jurisdiction to regulate virtually all aspects of this business, such as transportation of natural gas, rates and charges for services, construction of new facilities, depreciation and amortization policies, acquisition and disposition of facilities and the initiation and discontinuation of services.
Intrastate - The company's intrastate natural gas pipelines in Oklahoma, Kansas and Texas are regulated by the OCC, KCC and RRC, respectively, and by the FERC under the Natural Gas Policy Act for certain services where it delivers natural gas into FERC-regulated natural gas pipelines. In Texas and Kansas, natural gas storage may be regulated by the state and by the FERC for certain types of services.
Refined Products and Crude
The company's Refined Products and Crude segment is principally engaged in the transportation, storage and distribution of Refined Products and crude oil. This new business segment was added in conjunction with the Magellan Acquisition. The company's Refined Products pipeline system is one of the longest common carrier pipeline systems for Refined Products in the United States, extending approximately 9,800 miles from the Texas Gulf Coast and covering a 15-state area across the central and western United States. The company's crude oil pipelines transport crude oil to refineries, export facilities and demand centers. Throughout its distribution system, terminals play a key role in facilitating product movements and marketing by providing storage, distribution, blending and other ancillary services. Products transported on the company's Refined Products pipeline system include gasoline, distillates, aviation fuel and certain NGLs. Shipments originate on its Refined Products pipeline system from direct connections to refineries or through interconnections with other pipelines or terminals for transportation and ultimate distribution to retail fueling stations, convenience stores, travel centers, railroads, airports and other end users.
The company's crude oil assets are strategically located to transport and store crude oil supply and are connected with multiple trading and demand centers. The company's 450-mile Longhorn pipeline has the capacity to transport approximately 275 MBbl/d of crude oil from the Permian Basin in West Texas to its East Houston terminal. The company's Houston distribution system consists of more than 100 miles of pipeline that connect its East Houston terminal through several interchanges to various points, including multiple refineries throughout the Houston area and crude oil import and export facilities. The company's East Houston terminal is a primary delivery point for the HOU futures contract traded on ICE, and certain price quotes are based on trades at its terminal. The company owns approximately 400 miles of pipeline in Kansas and Oklahoma used for crude oil transportation service. The company's Cushing terminal primarily receives and distributes crude oil via the multiple common carrier pipelines that terminate in and originate from the Cushing crude oil trading hub. The company's Corpus Christi terminal receives product primarily from barges and pipelines that connect to its terminal for further distribution to end users by trucks, pipeline or waterborne vessels.
Property - The company's Refined Products and Crude segment includes the following wholly owned assets:
9,800 miles of Refined Products pipelines;
1,000 miles of crude oil pipelines;
54 Refined Products terminals;
two marine terminals; and
91 Million barrels (MMBbl) of operating storage capacity.
The operating capacity of the company's pipelines varies depending on pipeline diameter, product composition and segment of the system.
Transportation Services - The company generates revenue from transportation tariffs on volumes shipped on its Refined Products and crude oil pipeline systems. These transportation tariffs vary depending upon where the product originates, where ultimate delivery occurs and any applicable discounts. Transportation fees and discounts are in published tariffs filed with the FERC or the appropriate state agency or established by negotiated rates.
Storage and Terminal Services - The company generates additional revenue from providing pipeline capacity and tank storage services, as well as providing services, such as terminalling, ethanol and biodiesel unloading and loading, and additive injection, which are performed under a mix of as needed, monthly and long-term agreements.
Optimization and Marketing - At times, the company obtains Refined Products and crude oil and utilizes its assets, contract portfolio and market knowledge to capture location, product and seasonal price differentials through purchases and sales of product and liquids blending.
Unconsolidated Affiliates - The company's Refined Products and Crude segment has the following unconsolidated affiliates:
a 30% ownership interest in BridgeTex, which owns an approximately 400-mile crude oil pipeline with transport capacity of up to 440 MBbl/d that connects Permian Basin crude oil to the company's East Houston terminal;
a 30% ownership interest in Saddlehorn, which owns an undivided joint interest in an approximately 600-mile pipeline, with transport capacity of up to 290 MBbl/d of crude oil from the DJ Basin and Rocky Mountain region to storage facilities in Cushing, including the company's Cushing terminal; and
a 25% ownership in MVP, which owns a Refined Products marine storage terminal along the Houston Ship Channel in Pasadena, Texas, including more than 5 MMBbl of storage, two ship docks and truck loading facilities.
Government Regulation - The company's interstate common carrier pipeline operations are subject to rate regulation by the FERC under the Interstate Commerce Act, the Energy Policy Act of 1992 and related rules and orders. Most of the tariffs on the company's long-haul crude oil pipelines are established by negotiated rates that generally provide for annual adjustments in line with changes in the FERC index applicable to liquids pipelines, subject to certain modifications.
Seasonality
The company's liquids blending activities are limited by seasonal changes in gasoline vapor pressure specifications and by the varying quantity of the gasoline delivered to it.
Customers - The company's Natural Gas Gathering and Processing, Natural Gas Liquids and Refined Products and Crude segments derive services revenue from major and independent crude oil and natural gas producers. The company's Natural Gas Liquids segment's customers also include other NGL and natural gas gathering and processing companies. The company's downstream commodity sales customers are primarily petrochemical, refining and marketing companies, utilities, large industrial companies, natural gasoline distributors, propane distributors and municipalities. The company's Refined Products and Crude segment's customers also include crude oil producers, refiners, wholesalers, retailers, traders, railroads, airlines and regional farm cooperatives. End markets for Refined Products deliveries are primarily retail gasoline stations, truck stops, farm cooperatives, railroad fueling depots, military bases and commercial airports. The company's Natural Gas Pipeline segment's assets primarily serve LDCs, electric-generation facilities, large industrial companies, municipalities, producers, processors and marketing companies.
Other
Through ONEOK Leasing Company, L.L.C. and ONEOK Parking Company, L.L.C., the company owns a 17-story office building (ONEOK Plaza) and a parking garage in downtown Tulsa, Oklahoma, where its headquarters are located.
Regulatory, Environmental and Safety Matters
The company participates in Our Nation's Energy (ONE) Future Coalition to voluntarily report methane emission reductions and to calculate its methane intensity. The company is subject to PHMSA safety regulations, including pipeline asset integrity-management regulations. The company has reviewed its pipeline facilities according to the new guidelines and met the timelines associated with TSA reporting. The company's marine terminals along coastal waterways are subject to U.S. Coast Guard regulations and comparable state and municipal statutes relating to the design, installation, construction, testing, operation, replacement and management of these assets. The company's NGL, Refined Products and crude oil pipeline systems are subject to regulation by the DOT and PHMSA under the Hazardous Liquid Pipeline Safety Act of 1979, as amended (HLPSA).
The company is an obligated party under the Renewable Fuel Standard (RFS) promulgated by the EPA and are required to satisfy its Renewable Volume Obligation (RVO) on an annual basis.
History
ONEOK, Inc. was founded in 1906. The company was incorporated in 1997.
