ONEOK NGL reverses pipeline flow from Medford to Buston, to increase propane supplies to Midcontinent

06-Feb-14

ONEOK NGL Pipeline plans to reverse the flow of a pipeline to run from Medford, Oklahoma, to Buston, Kansas, in an effort to increase propane supplies to the US Midcontinent, as per Platts. ONEOK has 175,000 barrels of fractionation capacity at Medford. The North Line 5 traditionally runs north to south and connects NGL facilities in Medford with similar ones in Buston. Bushton is loacted about 50 miles Northwest of the Conway, Kansas, NGL trading hub. Strong propane demand for heating this winter has drawn propane stocks to record lows in the Midcontinent and shot prices to all-time highs. Conway propane was assessed at US$4.95/gal on January 23, the highest level since Platts started assessing propane in 1983. The assessment was at $1.85/gal on Tuesday, which was 8 cents lower from Monday. The main route between Conway and Mont Belvieu for purity NGLs is ONEOK's Sterling pipeline system. However, that pipeline is configured to run north to south, with reversal only occuring under certain circumstances. Therefore, tightness in the Midcontinent propane market has created logistical challenges for midstream companies as the look for alternative ways to move product to higher priced markets.