Midstream companies are seizing new opportunities in the natural gas liquids (NGL) sector, with ONEOK (OKE) and MPLX LP (MPLX) leading the charge. The two companies have announced plans to build a large-scale liquefied petroleum gas (LPG) export terminal in Texas City, Texas. Along with this, they will also construct a new pipeline to transport NGLs from ONEOK’s storage facility in Mont Belvieu, Texas, to the terminal.
New Export Terminal and Pipeline Details
The upcoming export terminal will have a capacity of 400,000 barrels per day (bpd), primarily handling low ethane propane (LEP) and normal butane (NC4). Both ONEOK and MPLX will reserve 200,000 bpd each for their respective customers. The joint venture for the export terminal, named Texas City Logistics LLC (TCX), will be equally owned by ONEOK and MPLX. MPLX will take charge of constructing and operating the terminal, with completion expected in early 2028.
In addition, a new pipeline, MBTC Pipeline LLC, will be built to connect ONEOK’s Mont Belvieu storage facility to the export terminal. The pipeline joint venture is 80% owned by ONEOK and 20% by MPLX, with ONEOK overseeing construction and operation.
Investment Breakdown
The total investment in the export terminal is estimated at $1.4 billion, with both companies contributing $700 million each. The pipeline project will require an additional $350 million, with ONEOK investing $280 million and MPLX contributing $70 million.
Why NGLs Matter: Growing Demand and Applications
NGL production in the U.S. has surged due to advancements in shale gas extraction, which has boosted overall oil and natural gas production. NGLs are extracted from natural gas at processing facilities before undergoing fractionation, where they are separated into different components, including:
- Propane – Used for heating, cooking, and as a feedstock for plastics.
- Butane – Primarily blended into gasoline.
- Ethane – A key raw material for ethylene production, essential in the plastics industry.
- Isobutane – Used in refining processes and as a refrigerant.
- Natural Gasoline – Blended with conventional gasoline.
LPGs, which include propane, butane, and isobutane, are becoming increasingly important due to growing global demand for plastics and energy needs.
Impact on the Midstream Energy Sector
This expansion aligns with broader trends in the midstream energy sector. The Alerian Midstream Energy Select Index (AMEI), which tracks North American energy infrastructure companies including MLPs and C-corps, is currently yielding 5.2% as of February 4. Investments in NGL transportation and export facilities highlight the sector’s strategic focus on meeting rising global energy and petrochemical demands.
ONEOK and MPLX’s investment in the Texas City LPG export terminal and pipeline marks a significant move in the midstream energy sector. As U.S. NGL production continues to grow, this project will help meet the increasing domestic and international demand for propane, butane, and other NGLs. With a $1.75 billion total investment, the partnership reflects a commitment to strengthening energy infrastructure and global supply chains. The success of this venture will be closely watched as the 2028 completion date approaches.
