ONEOK has agreed to acquire Medallion Midstream and a controlling interest in EnLink Midstream from Global Infrastructure Partners (GIP) in two transactions with a combined valued of $5.9bn.
The New York Stock Exchange (NYSE)-listed ONEOK will buy GIP’s 43% stake in EnLink Midstream at $14.9 per unit and will also acquire full ownership of the managing member interests for $300m. The overall cash consideration for this transaction totals approximately $3.3bn.
In a separate deal, ONEOK will acquire GIP’s equity interests in Medallion Midstream, a privately held system for crude gathering and transportation in the Permian Basin’s Midland region. This transaction is valued at $2.6bn in cash, reflecting about 6.3 times the projected EBITDA for 2025, including anticipated base case run-rate synergies.
These acquisitions are expected to enhance ONEOK’s existing infrastructure in Permian natural gas liquids (NGL) and crude. The deals will increase ONEOK’s capacity by 1.7 billion cubic feet per day for Permian gas processing and 1.6 million barrels per day for Permian crude gathering.
ONEOK intends to utilise these expanded facilities to offer improved services to regional producers. The EnLink acquisition will also reinforce ONEOK’s integrated gas and NGL platform in Oklahoma and provide gas gathering and processing operations in North Texas, which are connected to Mont Belvieu via the latter’s existing NGL pipelines.
Furthermore, ONEOK will establish a notable presence in Louisiana with 220,000 barrels per day of NGL fractionation capacity and about four billion cubic feet per day of natural gas pipeline capacity, both linked to major demand centres.
ONEOK president and CEO Pierce Norton II said: “ONEOK has a longstanding reputation as being intentional in building a premier energy infrastructure company, and today’s transactions further solidify that status by adding complementary assets that allow us to continue expanding and extending our value chain.
“We are particularly excited to meaningfully increase our company’s presence in the Permian Basin, which is expected to continue driving the majority of U.S. oil and gas growth.”
In addition to the commercial benefits from Medallion Midstream’s crude gathering infrastructure, ONEOK anticipates further synergies from acquiring EnLink.
Key opportunities for synergy include integrating ONEOK’s and EnLink’s Mid-Continent gathering and processing systems and optimising their Gulf Coast NGL assets.
Following the acquisition of GIP’s interests in EnLink, ONEOK plans to pursue the purchase of the publicly traded common units of EnLink in a tax-free transaction.
Both transactions have received unanimous approval from ONEOK’s board of directors. They are not interdependent and are expected to close early in Q4 2024, pending customary closing conditions, including clearance under the Hart-Scott-Rodino Act.
In late 2023, ONEOK completed the $18.8bn cash-and-stock acquisition of Magellan Midstream Partners. This was followed by the $280m acquisition of the Gulf Coast Liquids Pipeline System from Easton Energy, which closed in June 2024.
