ONEOK Partners' second-quarter 2014 earnings and revenues missed
the Zacks Consensus Estimate. However, top line increased from the
prior year, primarily due to higher natural gas volumes gathered,
processed and sold, and a rise in natural gas liquids (NGL) sales
volume as a result of completion of the growth projects. The
partnership continues to expand its operations through strategic
investments. The partnership's plan for several projects, including
the new natural gas processing plants and allied infrastructure in
Oklahoma and North Dakota, will enable it to meet increasing
service demand from customers. However, volatility in commodity
prices and stringent regulations make us cautious. Thus, we
maintain our Neutral recommendation.
Tulsa, OK-based ONEOK Partners L.P., one of the largest publicly
traded master limited partnerships (MLPs), is a leader in the
business of gathering, processing, storage and transportation of
natural gas in the United States. In addition, the partnership
operates major natural gas liquids (NGL) systems that connect NGL
supplies in the Mid-Continent and Rocky Mountain regions with key
market centers. The partnership also owns a 50% equity interest
Overland Pass Pipeline, importing natural gas from Canada into the
ONEOK Partners' NGL system in the Mid-Continent and the Gulf
Coast include fractionators and storage in Mont Belvieu, TX Bushton
and Conway, KS and Medford, OK. The partnership also owns
interstate NGL distribution pipelines between Conway and Mont
Belvieu, and NGL and refined petroleum products distribution
pipelines that connect its Mid-Continent NGL infrastructure to
Midwest markets, including Tennessee and Chicago.
The partnership's businesses are primarily divided into three
segments: Natural Gas Gathering and Processing segment, which
gathers and processes natural gas Natural Gas Pipelines segment,
which operates regulated interstate and intrastate natural gas
transmission pipelines and natural gas storage facilities and
Natural Gas Liquids segment, which gathers, treats, fractionates
and transports NGL and stores, markets and distributes NGL
ONEOK Inc. (OKE) through its wholly-owned subsidiary, ONEOK
Partners GP, holds the entire 2% general partnership (GP) interest
in ONEOK Partners L.P. In addition, ONEOK Inc. owns 43.3% of the
overall partnership interest in ONEOK Partners L.P.
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