Profile: ONEOK PARTNERS, L.P. (OKS)

ONEOK Partners, L.P. is engaged in the gathering, processing, storage and transportation of natural gas in the United States. In addition, the Company owns premier natural gas liquids systems, connecting natural gas liquid (NGL) supply in the Mid-Continent and Rocky Mountain regions with key market centers. It also own a 50 % equity interest in a transporter of natural gas imported from Canada into the United States. The Company operates through four business segments: Natural Gas Gathering and Processing segment primarily gathers and processes unprocessed natural gas; Natural Gas Pipelines segment primarily owns and operates regulated interstate and intrastate natural gas transmission pipelines and natural gas storage facilities; Natural Gas Liquids Gathering and Fractionation segment primarily gathers, treats and fractionates NGLs and stores and markets NGL products, and Natural Gas Liquids Pipelines segment primarily owns and operates Federal Energy Regulatory Commission (FERC)-regulated interstate natural gas liquids gathering and distribution pipelines.

Natural Gas Gathering and Processing

The Company’s operations include gathering of unprocessed natural gas produced from crude oil and natural gas wells. It gathers unprocessed natural gas in the Mid-Continent region, which includes the Anadarko Basin of Oklahoma and the Hugoton and Central Kansas Uplift Basins of Kansas. It also gathers unprocessed natural gas in two producing basins in the Rocky Mountain region: the Williston Basin, which spans portions of Montana, North Dakota and the Canadian province of Saskatchewan, and the Powder River Basin of Wyoming. Its Natural Gas Gathering and Processing segment gathers and processes unprocessed natural gas. It generally gathers and processes gas under contracts, such as Percent-of-Proceeds (POP), fee and Keep-Whole. Under a POP contract, it retains a percentage of the NGLs and/or a percentage of the residue gas as payment for gathering, compressing and processing the producer’s unprocessed natural gas. Under a fee contract, it is paid a fee for the services provided that is based on British thermal units (Btus) gathered, compressed and/or processed. Under a keep-whole processing contract, it extracts NGLs from the unprocessed natural gas and return to the producer volumes of residue gas containing the same amount of Btus as the unprocessed natural gas that was delivered to the Company.

Natural Gas Pipelines

ONEOK Partners, L.P.’s Natural Gas Pipelines segment primarily owns and operates regulated natural gas transmission pipelines, natural gas storage facilities, and non-processable natural gas gathering facilities. It also provides interstate natural gas transportation and storage service. Its interstate natural gas pipeline assets transport natural gas through FERC-regulated interstate natural gas pipelines in Montana, North Dakota, South Dakota, Minnesota, Wisconsin, Iowa, Illinois, Indiana, Kentucky, Tennessee, Oklahoma, Texas and New Mexico. Its interstate pipelines include, Midwestern Gas Transmission, which is a bi-directional system that interconnects with Tennessee Gas Transmission Company near Portland, Tennessee, and with several interstate pipelines near Joliet, Illinois; Viking Gas Transmission, which transports natural gas from an interconnection with TransCanada near Emerson, Manitoba, to an interconnection with ANR Pipeline Company near Marshfield, Wisconsin; Guardian Pipeline interconnects with several pipelines in Joliet, Illinois, and with local distribution companies in Wisconsin, and OkTex Pipeline, which has interconnects in Oklahoma, New Mexico and Texas.

The intrastate natural gas pipeline assets in Oklahoma have access to the major natural gas producing areas and transport natural gas throughout the state. It also has access to the major natural gas producing area in south central Kansas. In Texas, its intrastate natural gas pipelines are connected to the major natural gas producing areas in the Texas panhandle and the Permian Basin and transport natural gas to the Waha Hub, where other pipelines may be accessed for transportation east to the Houston Ship Channel market, north into the Mid-Continent market and west to the California market. It owns storage capacity in underground natural gas storage facilities in Oklahoma, Kansas and Texas.

Natural Gas Liquids Gathering and Fractionation

ONEOK Partners, L.P.’s natural gas liquids gathering and fractionation assets consist of facilities that gather, fractionate and treat NGLs and store NGL products primarily in Oklahoma, Kansas and Texas, as well as store and fractionate NGLs and NGL products in Mont Belvieu, Texas. Most of the pipeline-connected natural gas processing plants in Oklahoma, Kansas and the Texas panhandle, which extract NGLs from unprocessed natural gas, are connected to its gathering systems. Revenues for its Natural Gas Liquids Gathering and Fractionation segment are primarily derived from exchange services, optimization, isomerization and storage. Its exchange services business collects fees to gather, fractionate and treat unfractionated NGLs, thereby converting them into NGL products that are stored and shipped to a market center or customer-designated location. Its optimization business utilizes its assets, contract portfolio and market knowledge to capture locational and seasonal price differentials.

The Company moves NGL products between Conway, Kansas, and Mont Belvieu, Texas, in order to capture the locational price differentials between the two market centers. Its NGL storage facilities are also utilized to capture seasonal price variances. Its isomerization business captures the price differential when normal butane is converted into the more valuable iso-butane at an isomerization unit in Conway, Kansas. Iso-butane is used in the refining industry to increase the octane of motor gasoline. The Company’s storage business collects fees to store NGLs at its Mid-Continent and Mont Belvieu facilities.

Natural Gas Liquids Pipelines

The Company’s Natural Gas Liquids Pipelines segment primarily owns and operates FERC-regulated natural gas liquids gathering and distribution pipelines and associated above- and below-ground storage facilities. Its natural gas liquids gathering pipelines deliver unfractionated NGLs gathered in Oklahoma, Kansas, the Texas panhandle and the Rocky Mountain region to its Natural Gas Liquids Gathering and Fractionation segment’s Mid-Continent fractionation facilities in Oklahoma and Kansas. Its natural gas liquids distribution pipelines deliver unfractionated NGLs and NGL products to the natural gas liquids market hubs in Conway, Kansas, and Mont Belvieu, Texas. Through its acquisition of the natural gas liquids assets from Kinder Morgan Energy Partners, L.P. (Kinder Morgan), it acquired terminal and storage facilities, as well as natural gas liquids and refined petroleum products pipelines that connect its Mid-Continent assets with Midwest markets, including Chicago, Illinois.

It operates FERC-regulated natural gas liquids gathering and distribution pipelines in Oklahoma, Kansas, Nebraska, Missouri, Iowa, Illinois, Indiana, Texas, Wyoming and Colorado. It has product terminal and storage facilities in Missouri, Nebraska, Iowa and Illinois. Revenues for this segment are primarily derived from transporting product under its FERC-regulated tariffs. Natural Gas Liquids Pipelines segment has unconsolidated affiliates, which include 50 % ownership interest in Chisholm Pipeline Company, which operates an interstate natural gas liquids pipeline system extending approximately 184 miles from origin points in Oklahoma and Kansas and 50 % ownership interest in Heartland, which operates a terminal and pipeline system that transports refined petroleum products in Kansas, Nebraska and Iowa.

Other

ONEOK Partners, L.P.’s Other segment includes Black Mesa Pipeline, a 273-mile pipeline designed to transport crushed coal suspended in water that originates at a coal mine in Kayenta, Arizona, and terminates at the Mohave Generating Station (Mohave) in Laughlin, Nevada.