We have upgraded our recommendation on ONEOK Partners, L.P. to
Neutral from Underperform, primarily on the back of the
partnership's asset expansion through organic growth projects and
strategic acquisitions. The partnership's systematic investments in
growth projects and realization of positive synergies from past
ventures continue to boost its results. Multiple ventures under the
natural gas and natural gas liquids (NGL) segments will likely help
to serve more customers and boost cash inflow. In addition, a wide
array of project backlog will drive growth. However, volatility in
and the possibility of lower natural gas and NGL consumption during
this winter are concerning.
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
Through its wholly-owned subsidiary, ONEOK Partners GP, ONEOK
Inc. (OKE) 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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