(Bloomberg) — US pipeline operator ONEOK Inc. agreed to buy a Permian Basin rival and a controlling stake in another company in two transactions valued at a combined $5.9 billion.
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ONEOK will acquire Global Infrastructure Partners’ entire interest in EnLink Midstream LLC and also buy GIP’s equity interests in Medallion Midstream, the largest closely held crude gathering and transportation system in the Permian, it said in a statement late Wednesday.
The move expands ONEOK’s presence in the most prolific US oil and gas basin. It’s the latest in a spate of deals in the industry as private equity firms offload assets to corporate buyers. Operators of oil and gas assets are looking to scale up as cash-flush fossil fuel companies consolidate and look to refresh their drilling inventory.
New York-based Global Infrastructure Partners is a private equity firm specializing in energy, transportation, water and waste management.
ONEOK shares slipped 0.2% before the start of regular trading in New York. EnLink surged 12%.
The deals will give ONEOK an additional 1.7 billion cubic feet per day of gas processing capacity in the Permian and 1.6 million barrels per day of crude gathering capacity in the basin. They also expand the company’s presence in Oklahoma, North Texas and Louisiana.
The transaction is expected to close in the fourth quarter of 2024, Tulsa, Oklahoma-based ONEOK said in the statement. ONEOK has financing commitments from JPMorgan Chase & Co. and Goldman Sachs Group Inc. to cover up to $6 billion of the cash portion of the deals.
Goldman was ONEOK’s lead financial adviser for both transactions. Greenhill and Scotiabank served as advisers to GIP for the Enlink deal, while RBC Capital Markets advised GIP on the Medallion takeover.
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