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ONEOK Partners to invest over $400M in Bakken, Woodford growth projects

Projects include new natural gas processing plant in North Dakota

Tulsa, OK-based ONEOK Partners LP, one of the largest publicly traded master limited partnerships, plans to invest nearly $405 million to $470 million between now and the end of 2011 for projects in two shale plays, the Bakken Shale in the Williston Basin in North Dakota, and the Woodford Shale in Oklahoma.

These projects are part of the previously announced $2.5 billion to $3.5 billion of growth projects the midstream partnership has identified for investment between now and the end of 2015. 

These investments include construction of a new 100 million cubic feet per day (MMcf/d) natural gas processing facility - the Garden Creek plant - in eastern McKenzie County, ND, and related expansions that are estimated to cost between $150 million and $210 million and will double the partnership's natural gas processing capacity in the Williston Basin. Completion is expected in the fourth quarter of 2011.

"Producers with significant acreage dedications to ONEOK Partners' assets continue to aggressively develop these areas and need additional infrastructure," said Terry K. Spencer, ONEOK Partners COO. "Natural gas and natural gas liquids gathering system expansions, as well as construction of a new natural gas processing plant in the Bakken Shale region, are necessary to provide the services our customers expect from us."

In aggregate, these projects are expected to generate EBITDA (earnings before interest, taxes, depreciation and amortization) multiples of five to seven times. The incremental earnings from these projects are expected to increase distributable cash flow and value to unitholders in the form of higher distributions.

Additional Bakken Shale investments
In addition to the construction of a new natural gas processing plant, ONEOK Partners' natural gas gathering and processing segment will invest an additional $200 million to $205 million during 2010 and 2011 for new well connections, expansions and upgrades to its existing natural gas gathering system infrastructure in the Bakken Shale.

These investments include an expansion and upgrade of the natural gas gathering systems and adding new compression to serve the new Garden Creek plant; natural gas gathering system and compression upgrades to bring the existing Grasslands natural gas processing plant to its full capacity by the end of 2010; and $90 million to connect more than 300 wells in 2010 and approximately 400 wells in 2011 to the partnership's Williston Basin natural gas gathering system.

ONEOK Partners is the largest independent operator of natural gas gathering and processing facilities in the Bakken Shale region, with a gathering system of more than 3,500 miles. In March 2009, it completed a $46 million expansion of its Grasslands natural gas processing facility in North Dakota and since 2007 has invested more than $80 million in new well connections and related infrastructure upgrades to existing natural gas gathering systems in the region.

Woodford shale investments
In 2010 and 2011, the partnership will invest an additional $55 million in the Woodford Shale in Oklahoma with projects in the natural gas gathering and processing and the natural gas liquids (NGL) segments.

These investments include connecting the partnership's western Oklahoma natural gas gathering system to its existing 135 MMcfd Maysville natural gas processing facility in Garvin County, central Oklahoma. The project is currently under construction and expected to be completed during the fourth quarter of 2010. 

These investments also include approximately $20 million for new well connections in 2010 and 2011 to gather additional Woodford Shale natural gas volumes.

In the partnership's natural gas liquids segment, capital investments include the expansion of the partnership's existing Oklahoma NGL gathering system to connect a new 200 MMcfd natural gas processing plant currently under construction by Devon in Canadian County, OK that is expected to be completed in the fourth quarter of 2010. This expansion will increase the accessibility of this new supply source to the partnership's Arbuckle Pipeline and Mont Belvieu, Texas, fractionation facilities. 

Since 2007, ONEOK Partners has invested approximately $70 million in the Woodford Shale.

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