ONEOK, Inc. (NYSE:OKE) Q4 2022 Earnings Call Transcript

Neal Dingmann: All right. That’s a great point on the flip side of that. And then for my follow-up, in the PRB, one of the large operators has kind of said they were shifting to the Mowry, which comes — brings a much higher gas cut. I just wanted to check and see if you are you seeing — is that what you’re seeing? Or is that what you’re planning for? Or is the kind of guidance for the Rockies more so about the Bakken growth and maybe the PRB just assumes moderate growth?

Kevin Burdick: Yes. The last is what is the way we think about it. We’ve got a nice position in the G&P segment. We do have a very nice large position in our NGL business. There’s been several operators out there that have talked about the Powder and spending more capital. So we do have some modest growth built in. But the driver of the Rockies volumes is going to come from the Bakken.

Operator: The next question comes from with Bank of America.

Unidentified Analyst: I wanted to touch on the implications of building MB-6 to essentially replace Medford. I’m assuming that you’re going to flow less purity volumes on sterling and transition more to Y-grade down to Bellevue on Arbuckle. And I wanted to know the runway for Arbuckle on latent capacity before you’d have to consider an expansion for the increased volumes?

Sheridan Swords: Neil, this is Sheridan. Yes, you’re right. As we put MB-6 or as we’re moving raw feed today, we’re not moving as much purity products on the Sterling system. But as it comes to expanding Arbuckle II, we, as we did with other pipes, put it in a large diameter pipeline that if we need more capacity, it’s very easy to put in a couple of more pump stations, and we get hundreds of thousands of barrels more of capacity on that pipeline. And obviously, we are watching that, and we can react very quickly. So it’s fair to say we will not run out of raw feed capacity to Mont Belvieu from the Mid-Continent.

Unidentified Analyst: Got it. Great. And then the second question related to that when you look at optimization opportunities, obviously, it will be — have less capacity in Conway and sometimes you’re short propane in that market. And you have the ability to send natural gasoline up to Canada. How does the higher capacity in value versus Conway impact the optimization revenues going forward after you get the insurance proceeds?

Sheridan Swords: Neil, as we look at that, it’s going to change a little bit, but I don’t know from a financial impact, it’s going to have that big of an impact. We — as we went back and looked at it as we determined whether or not we were going to build Medford back or do MB-6, we noticed that most of the volume from Medford already flows to Mont Belvieu on average. And so I think I also look at it as this is going to put us back in a position by moving MB-6 down there the way we were before we did put in the Busan fractionator in ONEOK. The Busan fractionator today has enough volume to satisfy the mid-continent market what the deployment has there. We’ve transitioned our business to be a little bit more Bellevue anyway. So I think as we’ll be able to take advantage of probably spikes in the Convoy market, a little bit more than we have in the past, and we’ll be able to move — optimize the overall feed system down to the fractionators in Mont Belvieu.

So all in all, I don’t think it’s going to be that big of an impact on our optimization business.

Operator: The next question is from Robin Reddy with JPMorgan.