01—Abstract
Summary
Summary of the 8-K filed February 6, 2025. Cited figures are marked; the original filing is the authoritative source.
ONEOK (NYSE: OKE) announced on February 4, 2025 that it has entered into definitive agreements with MPLX LP to form two joint ventures: Texas City Logistics LLC, a 50/50 venture to build a new 400,000-barrel-per-day liquefied petroleum gas (LPG) export terminal in Texas City, Texas, and MBTC Pipeline LLC, an 80/20 venture (ONEOK/MPLX) to build a new 24-inch pipeline connecting ONEOK's Mont Belvieu, Texas, storage facility to the new terminal.
MPLX will construct and operate the export terminal, which is expected to be completed in early 2028 and will leverage Marathon's existing site and infrastructure for construction timing and cost benefits. ONEOK will construct and operate the pipeline. The total investment is approximately $1.4 billiona for the terminal, with ONEOK and MPLX each contributing about $700 million, and approximately $350 million for the pipeline, with ONEOK contributing about $280 million and MPLX about $70 million.
ONEOK's total share of capital investment across both projects is expected to be approximately $1.0 billionb. Throughput is expected to be primarily low ethane propane (LEP) and normal butane (NC4), with each partner contractually reserving 200,000 bpd for its own customers.
For investors, the filing is a significant expansion of ONEOK's NGL value chain and export capacity, supporting the company's stated growth plans while keeping capital spending within what management describes as a disciplined capital allocation framework. The 8-K itself contains no new financial results or guidance; the key risk flagged is that ONEOK may be unable to realize the anticipated benefits of the transaction, and the project timelines extend to 2028.
02—Key points
Key Highlights
- Definitive agreements signed with MPLX to form two joint ventures: a 50/50 LPG export terminal (Texas City Logistics LLC) and an 80/20 pipeline (MBTC Pipeline LLC).
- New 400,000 bpd LPG export terminal in Texas City, Texas, with MPLX constructing and operating the facility; completion expected in early 2028.
- Total project investment of about $1.75 billion ($1.4 billion terminal plus $350 million pipeline), with ONEOK's share approximately $1.0 billion.
- New 24-inch pipeline from ONEOK's Mont Belvieu, Texas, storage facility to the Texas City terminal, with ONEOK constructing and operating it.
- Each partner contractually reserves 200,000 bpd of terminal throughput for its own customers; primary products are LEP and normal butane.
- Expands and extends ONEOK's integrated NGL value chain and adds U.S. Gulf Coast export capacity, leveraging Marathon's existing infrastructure at the site.
- Filing is furnished under Item 7.01 (not deemed filed), and the announcement contains no updated financial results or guidance.
03—Questions
Frequently Asked Questions
How much capital will ONEOK need to commit to these projects?
ONEOK's share is approximately $1.0 billion in total: about $700 million for its 50% stake in the Texas City export terminal and about $280 million for its 80% stake in the Mont Belvieu-to-terminal pipeline.
Who will build and operate the LPG export terminal and the pipeline?
MPLX will construct and operate the export terminal through Texas City Logistics LLC, while ONEOK will construct and operate the 24-inch pipeline through MBTC Pipeline LLC.
When is the export terminal expected to be operational?
The terminal is expected to be completed in early 2028. Building on Marathon's existing location and infrastructure is expected to provide construction timing and cost benefits.
How will the terminal's capacity be used?
The terminal has a 400,000 bpd loading throughput, primarily low ethane propane and normal butane. ONEOK and MPLX each have contractually reserved 200,000 bpd for their own customers.
What are the main risks to the investment?
The filing's forward-looking statements caution that ONEOK may be unable to achieve the anticipated benefits of the transaction, and that other factors could cause results to differ materially. Investors should review the risk factors in ONEOK's most recent Form 10-K for further detail.
04—Continue