NEW YORK Oneok Inc. plans to discontinue its energy services segment through an "accelerated wind-down process, releasing non-affiliated, third-party natural gas transportation and storage contracts." The wind-down is expected to be completed by April 2014, the company said.
The division leases natural gas pipeline and storage capacity and provides peak-load, no-notice premium services to various natural gas utilities.
"The energy services segment continues to face challenging industry conditions that show no signs of improving," chairman and chief executive officer John Gibson said in a statement. "Increased natural gas supply and infrastructure, coupled with lower natural gas price volatility, have narrowed seasonal and location natural gas price differentials, resulting in limited opportunities to generate revenues to cover our fixed costs on this contracted storage and transportation capacity."
The Tulsa, Okla.-based energy services provider expects to take about $100 million in write-downs related to the closure.