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After 2017 merger, Oneok looks to massive infrastructure build-out


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After 2017 merger, Oneok looks to massive infrastructure build-out

Planning $4 billion in capital spending, the energy pipeline company ONEOK Inc. does not anticipate needing to tap third-party assets for growth in the near term, President and CEO Terry Spencer said.

"With organic growth opportunity that we see out front of the next three to five years, we are not in a position to have to do M&A today," Spencer said Feb. 27 during Oneok's fourth-quarter 2017 earnings conference call.

After merging with and integrating its pipeline master limited partnership in 2017, Spencer continued, Oneok in 2018 will focus on on expanding pipeline networks, plants, and fractionation and storage facilities thanks to the financial markets' positive reaction to the transaction.

Oneok tapped the public equity market for a $1.04 billion offering that will fund a new pipeline and related infrastructure for transporting natural gas liquids from the Rocky Mountains region to Oneok's NGL facilities in Oklahoma. On Feb. 21, the company committed to building $2.3 billion worth of NGL and gas processing infrastructure, including a 530-mile liquids pipeline that would move up to 400,000 barrels per day of mixed gas liquids to Oneok's processing facilities in Mont Belvieu, Texas.

Spencer also emphasized the possibility for Oneok to grow beyond its core gathering and processing business, namely projects related to NGL exports as international demand increases.

"We've got a number of other opportunities in the queue," he said. "There could be potential for some things later on in the year."

Oneok on Feb. 26 reported fourth-quarter 2017 adjusted EBITDA of $547.7 million, an increase from $474.1 million in the year-ago period. The company's distributable cash flow for the quarter was $366.0 million, up from $318.3 million in the prior-year period.

For 2017, Oneok reported full-year adjusted EBITDA of $1.99 billion, up from $1.85 billion in the prior-year period, and distributable cash flow of $1.38 billion, up from $1.32 billion in 2016.