ONEOK Announces Refined Products Pipeline Expansion to the Greater Denver Area
ONEOK (NYSE: OKE) has announced plans to expand its pipeline capacity connecting Mid-Continent and Gulf Coast refined products supply with the greater Denver area. The project includes:
- Construction of a new 230-mile, 16-inch diameter pipeline from Scott City, Kansas, to Denver International Airport (DIA)
- Addition or upgrading of pump stations along the existing refined products pipeline system
- Increase in total system capacity by 35,000 barrels per day
- Estimated cost of $480 million
- Expected completion in mid-2026
The project is fully subscribed under long-term contracts and aims to meet growing demand for refined products and renewable fuels in the Denver area, including aviation and sustainable aviation fuel for DIA's expansion.
- Expansion project fully subscribed under long-term contracts
- Increased pipeline capacity by 35,000 barrels per day
- Meeting growing demand for refined products and renewable fuels in Denver area
- Enhanced connectivity with Denver International Airport
- Potential for additional expansion capabilities
- High project cost of $480 million
- Long completion timeline (mid-2026)
ONEOK's announcement to expand its pipeline capacity to the Greater Denver area is significant and indicative of the growing demand for refined products and renewable fuels in the region. The 230-mile pipeline and the project’s $480 million price tag point to a substantial investment in infrastructure that could yield long-term benefits for the company.
This expansion directly aligns with the increasing energy demands driven by Denver International Airport's growth. By adding 35,000 barrels per day (bpd) in capacity, ONEOK positions itself to meet the aviation sector's needs efficiently, which includes the rising demand for sustainable aviation fuel. The project's full subscription under long-term contracts also suggests a stable revenue stream, mitigating risks associated with fluctuating demand.
In the short term, investors might see an increase in capital expenditure impacting earnings. However, the potential for increased revenue and market share in the long term could offset these initial costs. The project can be seen as a strategic move to strengthen market presence, improve competitive positioning and ultimately drive shareholder value.
From a financial perspective, the planned $480 million investment is a bold but calculated move. Given the project's full subscription under long-term contracts, ONEOK has secured predictable cash flows that can stabilize its financial projections. The increased capacity of 35,000 bpd indicates a significant boost in operational capabilities, which could lead to higher revenue from transporting refined products.
Such infrastructure investments often have a positive impact on a company’s stock by promoting growth and increasing investor confidence. However, the impact on ONEOK’s debt levels and cash reserves should be monitored closely. Investors need to consider whether the company can manage this capital outlay without compromising its financial health. The financing structure of this project, whether through debt, equity, or internal cash flows, will be important to watch.
Given the robust demand for aviation and sustainable fuels, the long-term outlook appears positive. However, any delays or cost overruns could pose risks to the projected returns. Investors should watch for project milestones and any emerging risks during the construction phase.
Includes Expanded Connectivity with
The project includes construction of a new 230-mile, 16-inch diameter pipeline from
Following the close of an open season earlier this year, the project is fully subscribed under long-term contracts.
"ONEOK is uniquely positioned to help meet the growing demand for refined products and renewable fuels across the greater
"This announcement is another example of the attractive-return growth opportunities ahead of us following the acquisition of our refined products and crude oil businesses," added Norton. "We remain focused on addressing growing energy demand while maintaining our commitment to safe and reliable operations."
At ONEOK (NYSE: OKE), we deliver energy products and services vital to an advancing world. We are a leading midstream operator that provides gathering, processing, fractionation, transportation and storage services. Through our more than 50,000-mile pipeline network, we transport the natural gas, natural gas liquids (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 today and into the future. As one of the largest diversified energy infrastructure companies in
ONEOK is an S&P 500 company headquartered in
For information about ONEOK, visit the website: www.oneok.com. For the latest news about ONEOK, find us on LinkedIn, Facebook, X and Instagram.
Some of the statements contained and incorporated in this news release are forward-looking statements as defined under federal securities laws. The forward-looking statements relate to our anticipated financial performance (including projected capital expenditures and cash flow), liquidity, management's plans and objectives for our future growth projects (including dates for expected completion of growth projects) and other future operations (including plans to construct additional refined products facilities and related cost estimates), market conditions and other matters. We make these forward-looking statements in reliance on the safe harbor protections provided under federal securities laws 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," "believe," "continue," "could," "estimate," "expect," "forecast," "goal," "guidance," "intend," "may," "might," "outlook," "plan," "potential," "project," "scheduled," "should," "will," "would" and other words and terms of similar meaning.
One 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, including, without limitation, ONEOK being unable to achieve the anticipated benefits of the transaction. 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 the other filings that we make with the Securities and Exchange Commission (SEC), which are available on 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: | Megan Patterson |
918-561-5325 | |
Media Contact: | Annell Morrow |
918-894-8740 |
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SOURCE Oneok, Inc.
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