ONEOK Buys Energy Assets for $5.9 Billion

Natural gas transport operator ONEOK has struck a deal to acquire interests in two energy companies for a total consideration of $5.9 billion.

One of the acquisitions will be a 43% stake in EnLink Midstream, the Wall Street Journal reported. The seller is Global Infrastructure Partners and the size of the deal 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 more than 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 diverse commodity cycles,” ONEOK said at the time.

The deals signal that the merger and acquisition wave that began in the shale oil patch is spreading across the industry. While the upstream mega deals in the shale patch have been drawing the most market attention, pipeline operators are also embarking on a merger spree in a quest to add scale, optimize assets, and gain more exposure to export markets.

Earlier this year, for instance, reports emerged that Occidental Petroleum was exploring the sale of a 49% stake in Western Midstream following its acquisition of CrownRock, the shale field operator.

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

The midstream 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 all-equity transaction valued at around $7.3 billion, including debt.

By Charles Kennedy for Oilprice.com

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