ONEOK (OKE) expects nearly 78% of its Natural Gas Liquids segment’s 2016 earnings to come from exchange services. These services include gathering, fractionating, and transporting raw NGLs (natural gas liquids) to storage and market hubs. The services are primarily fee-based.
ONEOK is focused on increasing its fee-based exchange services earnings. The above graph shows the growth in the contributions of the segment’s exchange services earnings compared to its total earnings.
Transportation and storage services contribute the next highest amount to the segment’s total earnings. Again, these are fee-based activities. Marketing and optimization activities are differential-based and are influenced by commodity prices. These activities collectively contribute nearly 10% to the segment’s earnings.
Next, let’s analyze ONEOK’s total earnings composition.