ONEOK Inc. and MPLX have entered into agreements to invest in and build a 400,000 bbl/d LPG export terminal worth $1.4 billion as well as a $350 million pipeline project. (Source: Shutterstock.com)
ONEOK Inc. and MPLX LP have agreed to form joint ventures for a large scale LPG export terminal on the Texas Gulf Coast and a new 24-inch pipeline project collectively worth about $1.75 billion.
In a 50-50 JV, the companies will form Texas City Logistics LLC (TCX) to build a new 400,000 bbl/d LPG export terminal in Texas City, Texas. MPLX will construct and operate the facility, which both companies said is expected to be completed and in service by early 2028.
The companies announced the partnerships separately on Feb. 4.
ONEOK's and MPLX's will each invest $700 million in the Texas City export terminal, for a total of $1.4 billion. The export terminal will leverage Marathon Petroleum's existing location and infrastructure “providing construction timing and cost benefits,” according to ONEOK. MPLX is a midstream MLP formed by Marathon in 2012.
The 400,000-bbl/d loading throughput is expected to primarily be low ethane propane and normal butane, with ONEOK and MPLX each contractually reserving 200,000-bbl/d for their respective customers.
In another JV, MBTC Pipeline LLC, the companies will also build a new pipeline from ONEOK's Mont Belvieu, Texas, storage facility to the new terminal. The JV will be 80% owned by ONEOK and 20% by MPLX.
ONEOK will construct and operate the $350 million pipeline. ONEOK's investment in MBTC will be $280 million; MPLX will invest $70 million.
ONEOK's share of capital investment for both projects is expected to be approximately $1 billion, the company said.
"We are excited to collaborate with MPLX on these strategically located projects which expand and extend our NGL value chain providing additional optionality and value to our customers," said Pierce H. Norton II, ONEOK president and CEO. "Given our high expectations for future growth and demand for more energy infrastructure, including export capacity, these projects with MPLX complement our disciplined capital allocation strategy."
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