Oneok Inc. plans to invest around $1.4 billion to construct a new pipeline and related infrastructure to transport natural gas liquids (NGLs) from the Rocky Mountain region to the company's existing mid-continent NGL facilities.

The Elk Creek Pipeline — an approximately 900-mile, 20-inch diameter pipeline that is expected to be completed by the end of 2019 — would, if built, have the capacity to transport up to 240,000 barrels per day (bpd) of unfractionated NGLs from the company's Riverview terminal in eastern Montana to Bushton, Kansas.

The Elk Creek Pipeline is expected to cost approximately $1.2 billion, with related infrastructure costs expected to total approximately $200 million. The pipeline will have the capability to be expanded to 400,000 bpd with additional pump facilities.

Existing pipelines are operating at full capacity and additional NGL takeaway capacity is needed to meet the needs of producers who are increasing production and are required to meet natural gas capture targets in the Williston Basin, the company says. The Elk Creek Pipeline would strengthen Oneok's position in the Bakken, Powder River and Denver-Julesburg regions and also provide additional reliability and redundancy for its NGL system.

The company says its proposed Elk Creek Pipeline is backed by long-term contracts with terms ranging between 10 to 15 years totaling approximately 100,000 bpd, which is supported primarily by minimum volume commitments.

Oneok expects to finance the Elk Creek Pipeline with a combination of new equity, including $450 million of net proceeds received from common stock issued during 2017 under its "at-the-market" equity program, with cash from operations in excess of dividends and short- and long-term borrowings.

This project is part of Oneok's $3.0-3.5 billion of potential capital-growth projects. Oneok says it expects to finance its additional capital-growth projects in 2018 and well into 2019 with cash generated from operations and short- and long-term borrowings.