ONEOK and MPLX Form Strategic Joint Ventures for LPG Export Terminal
In a significant move towards enhancing energy infrastructure on the U.S. Gulf Coast,
ONEOK, Inc. (NYSE: OKE) and
MPLX LP (NYSE: MPLX) have announced the formation of joint ventures focusing on the construction of a new liquefied petroleum gas (LPG) export terminal. This facility, poised to handle an impressive throughput of 400,000 barrels per day (bpd), is set to be built in
Texas City, Texas.
The partnership, known as Texas City Logistics LLC (TCX), is equitably owned by
ONEOK and
MPLX, each holding a 50% stake in the venture. MPLX will spearhead the construction and operational phase while utilizing Marathon's existing location, which not only expedites the project timeline but also optimizes costs through pre-existing infrastructure.
According to industry estimates, the total investment for the terminal is projected to reach around
$1.4 billion, with
ONEOK and
MPLX each contributing approximately
$700 million. The terminal is designed to handle predominantly low ethane propane (LEP) and normal butane (NC4), thereby aligning with current market demands. Both companies have securely reserved 200,000 bpd for their respective clients under contractual agreements.
In addition to the terminal, the joint ventures include the establishment of a new 24-inch pipeline which will connect
ONEOK's Mont Belvieu storage facility to the Texas City terminal. This initiative, dubbed MBTC Pipeline LLC, will be mainly operated by
ONEOK, with a financial structure reflecting an 80% ownership for
ONEOK and 20% for
MPLX. The combined investment in the pipeline is expected to reach
$350 million, split into
$280 million anticipated from
ONEOK and
$70 million from
MPLX.
The prevailing anticipation surrounding this new terminal reflects the companies' strategies to bolster their
NGL (natural gas liquids) value chain. Pierce H. Norton II, the president and CEO of
ONEOK, articulated his enthusiasm regarding this partnership, emphasizing its capacity to add substantial value and additional energy options for their clientele.
These initiatives underscore
ONEOK’s commitment to facilitating energy growth amid escalating demands for more robust energy infrastructure. As a key player in the midstream sector,
ONEOK is recognized as one of North America’s largest diversified energy infrastructure companies, managing a vast pipeline network exceeding 60,000 miles. The company's services range from gathering and processing to transportation and storage of crucial energy products.
Moreover, the
Texas City terminal, anticipated to break ground shortly, aims to be operational by early
2028, marking a pivotal step towards enhancing export capacity and meeting burgeoning energy demands both domestically and internationally.
In conclusion, the collaborative efforts between
ONEOK and
MPLX signify a progressive step towards ensuring energy infrastructure meets the growing requirements of the present and future markets. This venture not only contributes to energy security but also aligns with
ONEOK's proactive capital allocation strategy designed to accommodate anticipated growth within the sector.
For further details on
ONEOK, please visit
www.oneok.com. The latest news updates can also be found on their social media platforms, including LinkedIn, Facebook, and Instagram.