In separate agreements, ONEOK Inc., Tulsa, Okla., has agreed to acquire Medallion Midstream LLC and controlling interest in EnLink Midstream LLC from Global Infrastructure Partners (GIP) for $5.9 billion, adding to the company’s existing Permian natural gas liquids (NGL) and crude oil infrastructure platform.
By acquiring Medallion Midstream, the largest privately held crude gathering and transportation system in the Permian’s Midland basin, along with interest in EnLink, ONEOK establishes a fully integrated Permian Basin platform at scale, the company said in a release Aug. 28.
The transactions include 1.7 bcfd of Permian gas processing capacity and 1.6 million b/d of Permian crude gathering capacity.
"We are particularly excited to meaningfully increase our company's presence in the Permian basin, which is expected to continue driving the majority of US oil and gas growth,” said Pierce H. Norton II, ONEOK president and chief executive officer.
The acquisitions also expand ONEOK’s footprint in mid-continent, North Texas, and Louisiana, adding to the company’s existing integrated gas and NGL platform in Oklahoma and providing gas gathering and processing operations in North Texas that are directly connected to Mont Belvieu by ONEOK's NGL pipelines.
With the EnLink transaction, ONEOK gains a new position in Louisiana that includes 220,000 b/d of NGL fractionation capacity and about 4.0 bcfd of natural gas pipeline capacity.
Deal details
About $300 million of the total $3.3 billion purchase price for the EnLink interests is for GIP's 100% interest in the managing member of EnLink. GIP's common units in EnLink are being purchased for a total value of $3.0 billion. As a result of the transaction with GIP, EnLink will be a consolidated subsidiary of ONEOK for GAAP financial reporting purposes.
After the closing of the purchase of GIP's interests in EnLink, ONEOK intends to pursue the acquisition of the publicly held common units of EnLink in a tax-free transaction.
The transactions are not cross conditional and are expected to close early in this year’s fourth quarter.
Upon closing of the EnLink transaction, ONEOK will have control of EnLink's managing member and intends to replace the board members currently designated by GIP with new board members designated by ONEOK.
The company said it will maintain its headquarters in Tulsa, and intends to retain a ‘meaningful employee presence’ in Dallas and Houston.