ONEOK buys energy assets for $5.9 billion

Natural gas carrier ONEOK has entered into an agreement to acquire interests in two energy companies for a total of $5.9 billion.

One of the purchases will be a 43 percent stake in EnLink Midstream, the Wall Street Journal reported. The seller is Global Infrastructure Partners, and the value of the transaction is $3.3 billion.

The other acquisition is for Global Infrastructure Partners’ stake in a company called Medallion Midstream for $2.6 billion.

ONEOK is one of the largest energy infrastructure operators in North America. It has a network of over 50,000 miles of pipelines. Some of that was added to the company’s total last year when it acquired Magellan Midstream Partners for $18.8 billion.

“This acquisition creates a more resilient energy infrastructure company that is expected to produce stable cash flows through various commodity cycles,” ONEOK said at the time.

The deals signal that the wave of mergers and acquisitions that began in the shale oil area is spreading across the industry. While upstream shale mega-deals have garnered most of the market’s attention, pipeline operators are also embarking on mergers in an attempt to increase scale, optimize assets and get more much exposure to export markets.

Earlier this year, for example, reports surfaced that Occidental Petroleum was exploring selling a 49 percent stake in Western Midstream after acquiring shale field operator CrownRock.

In a deal last year, natural gas pipeline operator Energy Transfer bought midstream energy company Crestwood Equity Partners in a total transaction valued at about $7.1 billion, including the assumption of $3.3 billion in debt.

The merger frenzy continued into 2024, with gas station owner Sunoco LP announcing in January that it would buy pipeline and liquids terminal operator NuStar Energy in an equity deal valued at about $7.3 billion, including debt.

By Charles Kennedy for Oilprice.com

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