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ONEOK connects oil and gas production with the businesses that use those products. It gathers gas from wells and processes it to separate natural gas liquids from the remaining gas. It then separates those liquids into individual products and stores or delivers them to customers such as petrochemical companies, refiners and propane distributors. Its gas pipelines serve utilities and industrial users. It also transports and stores crude oil and finished fuels, linking refineries with fuel distribution and export facilities.
Producers, utilities, refiners and other customers pay ONEOK for processing, transportation, storage and related services. Commodity sales—mostly liquids—account for most revenue, but service fees generate most earnings. ONEOK also keeps part of the proceeds from some commodity sales and earns money from price differences between products and locations, so its earnings are not entirely insulated from commodity prices. One unnamed customer accounts for a meaningful share of revenue across all its businesses.
Its gathering and processing operations depend on producers drilling and supplying enough oil and gas to replace declining output from existing wells. Fuel demand and deliveries from connected refineries and pipelines also support its liquids business. Most natural gas pipeline capacity, by contrast, is covered by long-term contracts that pay for firm capacity. Federal and state regulators oversee pipeline rates and service terms and can require rate reductions or refunds.
The risk section is the longest, dullest part of the filing. This keeps only what can really hurt you: where it hits, how hard, when it plays out.
Every company claims an edge. Each one is checked against hard numbers like margins and returns: which hold, and which line gives way first.
Targa Resources competes with ONEOK for producers’ gas: both collect and process it, extract natural gas liquids (NGLs) and move those liquids to downstream buyers. Watch Targa’s success in securing new supply with its well-to-market services—the same business ONEOK seeks.
Enterprise Products Partners competes with ONEOK to move producers’ natural gas liquids to domestic buyers and export markets, alongside gas and crude transport. Its Mont Belvieu facilities separate mixed liquids into individual products, linking pipelines, storage and export terminals; developments there matter to ONEOK’s NGL business in the same market.
Energy Transfer competes with ONEOK for producers’ gas collection and processing business, the separation of natural gas liquids into individual products, and gas, crude and refined-fuel transport. Both also deliver gas to OG&E’s power plants, making power-generation transport contracts a concrete overlap to watch.
Kinder Morgan competes with ONEOK in selling gas transport and storage services and moving crude oil and refined fuels for customers. Its gas-pipeline and storage business is the useful comparison for ONEOK’s services to utilities and industrial users, rather than Kinder Morgan’s total pipeline mileage.
Williams competes with ONEOK for fees from collecting and processing producers’ gas, extracting natural gas liquids, and providing gas transport and storage capacity. Williams’ gathered and treated gas volumes are worth watching because it generally charges by volume—a direct view of the producer activity behind these services.
Plains All American Pipeline competes with ONEOK to collect Permian crude and transport and store it for refinery and export markets. Its crude transportation fees and storage business are the relevant results to watch for competition facing ONEOK’s crude network.
Enbridge competes with ONEOK in transporting customers’ crude oil and natural gas, but they also invest together in pipelines carrying gas out of the Permian Basin. News on Matterhorn and Eiger Express therefore concerns shared investments, not just rival capacity.
Plains GP Holdings gives investors indirect exposure to PAA’s crude and natural gas liquids transport and storage network, which competes with ONEOK; its cash comes through AAP from PAA distributions, not its own operating assets. PAA also holds interests in ONEOK-operated BridgeTex and Saddlehorn, so news on those crude pipelines concerns assets they share.
Kinetik competes with ONEOK to collect and process Permian producers’ gas, but also uses ONEOK pipelines to move the gas and natural gas liquids left after processing. Watch its use of Roadrunner for processed gas and West Texas NGL for liquids: these outlets connect a rival’s processing business to ONEOK’s transport services.
Hess Midstream processes Williston Basin gas alongside ONEOK and earns service fees from Chevron and third parties; its partly owned LM4 plant also connects to ONEOK’s Elk Creek NGL pipeline. LM4 processing activity is the concrete link to watch for liquids entering ONEOK’s network.
Summit Midstream competes with ONEOK for producers’ regional gas collection and processing fees, while its Oklahoma processing assets use ONEOK’s natural gas liquids system. Watch Tall Oak’s liquids-rich gas processing for key customer Calyx Energy, which links Summit’s producer business to ONEOK’s NGL outlets.
BKV relies on ONEOK to collect and process much of its Barnett gas, paying for services and selling ONEOK all natural gas liquids covered by its Bridgeport contract. Watch BKV’s Barnett production: the gathering agreements have no minimum-volume commitments, so they do not guarantee ONEOK a minimum flow of gas.
Kinder Morgan, Inc. earningsKMI
Kinder Morgan’s gas-pipeline and storage business shows whether demand is holding up for services that ONEOK also sells to utilities and industrial customers.
Look at activity and earnings in Kinder Morgan’s gas-pipeline and storage business. If both hold up or rise, utilities and industrial customers are still using these services, supporting the demand backdrop for ONEOK’s gas-pipeline business. If they weaken, demand from these customers may be softening, but Kinder Morgan’s results do not establish ONEOK’s own volumes or earnings.
EIA Crude Oil Stocks Change (Oct/16)
Weekly US crude oil and gasoline stocks show whether supplies are building or being drawn down; tighter or looser markets can shift crude and refined-product shipments on ONEOK’s network and customers’ demand for storage.
A stock build points to looser supply and may weigh on shipments or storage demand if price swings narrow; a draw points to tighter supply and may support shipments or make storage more useful if volatility rises.
Oneok, Inc. earningsThis company
ONEOK earns service fees by gathering, processing and moving energy products, and its report will show whether flows across its businesses are translating into higher segment earnings.
Compare volumes in gathering and processing, natural gas liquids, and refined products and crude with adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) for those segments. Rising volumes alongside rising segment earnings would show that more business is adding to profits; weakening volumes or earnings that fail to keep pace would show that producer supply, product demand, business mix or costs still matter for this largely fee-based company.
Enterprise Products Partners L.P. earningsEPD
Enterprise Products Partners’ Mont Belvieu facilities separate, transport and store natural gas liquids, giving its report a read on demand in a market where ONEOK also moves NGLs.
Read activity in Enterprise Products Partners’ natural gas liquids business alongside its related earnings. Strength in both would suggest demand for separation, transport and storage around Mont Belvieu is holding up, supporting the market in which ONEOK’s NGL business operates; weakness in both would point to softer demand. Commodity prices and product mix can also affect earnings, so earnings alone do not establish volumes.
Hess Midstream LP Class A Share representing a limited partner Interest earningsHESM
Hess Midstream’s LM4 plant connects to ONEOK’s Elk Creek NGL pipeline, so its report can show whether activity is increasing at this specific supply link.
Watch the processing activity Hess Midstream reports for LM4. Higher activity means more natural gas liquids may be entering the supply chain connected to Elk Creek, supporting feed into this part of ONEOK’s network; lower activity means less potential supply through this link. It speaks to this source, not to total flow across ONEOK’s system.
Williams Companies Inc. earningsWMB
Williams generally charges by volume for gathering and treating producers’ gas, so its report shows both producer activity and how much gas this competitor is handling.
Look at Williams’ gathered and treated gas volumes. Rising volumes mean producers are delivering more gas into gathering systems, but they may also mean Williams is winning flows from competitors; falling volumes could reflect weaker production activity or lost supply. Either outcome gives a market signal for ONEOK’s comparable business, but does not prove how ONEOK’s own volumes changed.
BKV Corporation earningsBKV
BKV’s Barnett production drives the gas it sends through ONEOK’s gathering and processing services, and those agreements do not guarantee minimum volumes.
Watch the Barnett production BKV reports. Higher production could send more gas through ONEOK’s gathering and processing system and support related NGL sales; lower production could reduce the gas volume on which ONEOK earns service fees. Because the agreements have no minimum-volume commitments, they do not provide a guaranteed floor if production weakens.
Plains All American Pipeline, L.P. earningsPAA
Plains All American Pipeline competes with ONEOK for Permian crude gathering, transport and storage, and its report shows how active that rival business is.
Read Plains All American Pipeline’s crude transportation activity alongside its storage business. Strength in both would show the competitor handling more crude business, potentially increasing competitive pressure on ONEOK’s crude network; weakness could ease that pressure, but could also reflect softer crude supply or market demand, not better results for ONEOK.
Industrial Production MoM (Oct)
ONEOK’s gas pipelines and refined-products network carry fuel for industrial customers and end users, so factory, mine and utility output can change the gas transportation and product-shipment fees it earns.
If output is rising, industrial customers may need more gas transportation and ONEOK may move more refined products; falling output can weaken those needs and shipments, affecting related service fees.
