ONEOK, Insurers Agree to $930M Settlement Over Natural Gas Plant Explosion

Tulsa, Oklahoma-based natural gas provider ONEOK, Inc. (NYSE: OKE) announced that it has reached an agreement with its insurers to settle all claims for physical damage and business interruption related to an explosion at a natural gas plant in Medford, Oklahoma that occurred in July 2022.

Under the terms of the settlement agreement, ONEOK agreed to resolve its claim for total insurance payments of $930 million, including $100 million received to date. The outstanding settlement payment is required to be paid by the insurers within 45 days. The proceeds will serve as settlement for property damage and as a payment in lieu of future business interruption insurance claims.

An explosion occurred the afternoon of July 9, 2022 at ONEOK’s NGL facility in Medford, resulting in a fire that forced local residents to evacuate. No injuries were reported.

According to the Journal Record, ONEOK incurred business interruption losses of $21.7 million for the third quarter 2022.

“We are pleased to have come to a successful agreement with our insurance carriers that was the result of a collaborative process,” said Pierce H. Norton II, ONEOK president and chief executive officer. “This agreement provides us the certainty of insurance recovery, and shortens the construction period to restore the most efficient fractionation capacity to our integrated system to meet expected growth in NGL supply for petrochemical and export demand.”

When the insurance proceeds are received, the company expects to apply cash from the settlement payment to the balance of any insurance receivables outstanding as of December 31, 2022, and record a gain for the remaining settlement proceeds in the first quarter 2023.

Source: ONEOK

Topics Carriers