ONEOK (OKE) is rebuilding the 210 Mb/d Medford fractionator in Oklahoma after the facility was damaged in a July 2022 explosion. East Daley believes the project is strategically important for maximizing utilization across OKE’s integrated NGL system connecting Conway, KS and Mont Belvieu, TX.
Conway mainly supplies propane, butane and natural gasoline to the Midwest, where demand is stable. Mont Belvieu, however, is key for NGL demand growth, driven by Gulf Coast petrochemicals and international exports.
OKE’s Arbuckle NGL pipelines transport mixed NGLs from Conway to Mont Belvieu, operating at 85% capacity over the last year. By contrast, OKE’s Sterling purity product pipeline is underutilized at just 34% (see map above). The new fractionator will improve OKE’s ability to separate ethane from propane, increasing the use of the Sterling system to supply the growing Mont Belvieu market. This, in turn, will create more capacity on Arbuckle for future supply growth.
The Medford project also provides OKE with critical optionality at a time when Mont Belvieu fractionation is structurally tight. East Daley expects Gulf Coast fractionation constraints to persist through the end of the decade as NGL production and export demand continue outpacing new capacity additions.
The chart to the right, available in the NGL Hub Model in Energy Data Studio, shows Conway fractionation capacity by operator in the stacked area, while estimated throughput is shown in the black line.
Enterprise Products (EPD) reinforced this view during its 1Q26 earnings call, noting improving fractionation feed volumes across the Mont Belvieu complex. Tightness in Gulf Coast fractionation raises the value of assets like Medford, particularly for integrated operators with both transportation and storage exposure.
By rebuilding Medford, ONEOK gains greater flexibility to optimize fractionation economics between Conway and Mont Belvieu. The company can capture regional purity product spreads while reducing its dependence on constrained Gulf Coast fractionators. In effect, OKE is partially de-bottlenecking its Mont Belvieu position by relocating a portion of its fractionation activity upstream.
The strategy is especially well suited to OKE’s supply footprint. While Permian NGLs have limited access into Conway, OKE’s sizable Bakken and Rockies positions provide a natural source of incremental barrels that can benefit from Conway fractionation and downstream Sterling transport capacity.
The result is a more efficient system-wide optimization strategy: Medford enables OKE to separate more barrels upstream, increase utilization on an underused pipeline asset, and preserve long-haul mixed NGL takeaway capacity as Bakken and Rockies production continues to expand. – Julian Renton Tickers: EPD, OKE
Download Part II of East Daley’s Permian Basin White Paper Series
The Permian Basin’s next big buildout is already taking shape, but this time the driver isn’t crude oil. In The Permian Basin at a Crossroads: Why This Pipeline Boom is Different, East Daley Analytics’ latest white paper reveals how gas demand from AI data centers, utilities and LNG exports is rewriting the midstream playbook in the leading US basin. Over 10 Bcf/d of new capacity and $12 billion in investments are reshaping flows, turning the Permian into a gas powerhouse even as rigs decline. Read Part II: Why This Pipeline Boom is Different
The Daley Note
Subscribe to The Daley Note for energy insights delivered daily to your inbox. The Daley Note covers news, commodity prices, security prices and EDA research likely to affect markets in the short term.