The sharp drop in crude oil and natural gas prices plus a slowdown in drilling forced ONEOK to stop work on its third Demicks Lake gas processing plant.
It is part of a $500 million reduction in capital spending.
The scope of the Elk Creek Pipeline expansion will be reduced, with the ability to add pump stations incrementally to meet customer needs as necessary, the company said.
ONEOK had previously announced a $305 million upgrade on the 900-mile NGL pipeline bringing total capacity to 400,000 BPD in 2021.
“The planning and work we have already completed allow us to quickly resume these suspended capital-growth projects when the environment improves and our customers require these services,” said President and CEO Terry K. Spencer.
“Despite the volatile commodity price environment in recent days, ONEOK’s financial flexibility, significant dividend coverage and investment-grade balance sheet position ONEOK well to weather these challenging market conditions,” Spencer said.
ONEOK had committed $305 million to construction of Demicks Lake III which is under construction. Two other gas plants at the site process 400,000 Mcf a day.
“Break-even prices for our well-capitalized producer customers have improved significantly over the last several years, which gives us the confidence that the Williston Basin is expected to remain a competitive producing region through this volatile and uncertain commodity price environment,” Spencer said. “The potential for ethane recovery to meet downstream pipeline BTU specifications also provides a tailwind to our natural gas liquids volume expectations.”