Tulsa-based Oneok Inc. is enriching its Lower 48 midstream platform in two bang-up deals with Global Infrastructure Partners (GIP) that would expand its reach in the Permian Basin, Midcontinent and North Texas – and give it access to natural gas opportunities in Louisiana.
In one transaction, Oneok clinched a $3.3 billion definitive agreement to acquire 43% of EnLink Midstream LLC’s outstanding common shares and all the managing member stakes.
Dallas-based EnLink provides services in the Permian, the largest segment, as well as in Louisiana, North Texas and Oklahoma. The Louisiana system alone includes 3,100 miles of natural gas transmission lines and 11 Bcf of storage. It also has two natural gas processing facilities in the state with 710 MMcf/d capacity.
In a second transaction with GIP, Oneok agreed to pay $2.6 billion for equity stakes in Medallion Midstream LLC, the largest privately held crude gathering and transportation system in the Permian Midland sub-basin.
“We are particularly excited to meaningfully increase our company’s presence in the Permian Basin, a region that is expected to continue driving the majority of oil and gas growth in the United States,” CEO Pierce H. Norton II said during a conference call.
The new Permian assets include 1.7 Bcf/d of natural gas processing capacity and 1.6 million b/d of crude gathering capacity.
The transactions would enhance Oneok’s existing integrated natural gas and natural gas liquids (NGL) platforms in Oklahoma, with the North Texas purchase boosting gas gathering and processing (G&P) operations.
The EnLink purchase opens the door to Louisiana opportunities, where it would gain 4 Bcf/d of natural gas pipeline capacity and 220,000 b/d of NGL fractionation capacity.
The Louisiana capacity is “connected to key demand centers and is positioned to help get our products to markets, domestically and around the world,” Norton said. “Oneok expects the natural gas transmission assets to benefit from strong industrial demand growth related to power generation for data centers, LNG export terminals and existing and permitted ammonia and hydrogen facilities.”
About 6 Bcf/d of liquefied natural gas export capacity is underway on the Louisiana coast, Norton noted.
EnLink earnings are 90% fee-based, while Medallion transportation contracts are 100% fee-based, executives noted.
The transaction is expected to close by year’s end. Once Oneok completes the EnLink purchase from GIP, it said it wanted to acquire the remaining publicly held interests in the firm.
Oneok said it would maintain its headquarters in Tulsa, but retain “meaningful presences in the Houston and Dallas metropolitan areas.”
