ONEOK Acquires EnLink and Medallion in $5.9 Billion Deal
ONEOK Inc., a US pipeline operator, announced a $5.9 billion transaction involving the acquisition of EnLink Midstream LLC and a controlling stake in Medallion Midstream. This strategic move strengthens ONEOK’s presence in the Permian Basin, the most prolific oil and gas basin in the US.
Expansion in the Permian Basin
The acquisition of EnLink and Medallion significantly expands ONEOK’s operations in the Permian Basin. The company gains an additional 1.7 billion cubic feet per day of gas processing capacity and 1.6 million barrels per day of crude gathering capacity in the region. This enhanced portfolio positions ONEOK to capitalize on the growing demand for liquefied natural gas along the Louisiana coastline.
Positioned for Industrial Growth
EnLink’s assets in Louisiana provide ONEOK with a new foothold in the state, offering 220,000 barrels per day of NGL fractionation capacity and 4 billion cubic feet per day of natural gas pipeline capacity. These assets connect to key demand centers, catering to the robust industrial demand for power generation, LNG export terminals, and ammonia and hydrogen facilities.
Competitive Advantage in the Permian
Chief Executive Officer Pierce Norton emphasized the value of expanding ONEOK’s presence in the Permian Basin. The company’s comprehensive suite of services, ranging from gas processing and transportation to fractionation and storage, positions it as a “one-stop shop” for energy producers in the region. Norton believes this competitive advantage will drive success in the highly competitive Permian Basin.
Transaction Details and Financing
The transaction is anticipated to close in the fourth quarter of 2024. ONEOK has secured financing commitments from JPMorgan Chase & Co. and Goldman Sachs Group Inc. to cover up to $6 billion of the cash portion of the deals. Goldman Sachs acted as ONEOK’s lead financial adviser for both transactions, while Greenhill, Scotiabank, and RBC Capital Markets advised Global Infrastructure Partners.
Industry Trends
The acquisition is part of a larger trend within the energy industry. Cash-flush fossil fuel companies are consolidating to refresh their drilling inventory and scale up operations. Private equity firms, such as New York-based Global Infrastructure Partners, are divesting assets to corporate buyers. These transactions allow energy operators to expand their footprints and meet the growing demand for energy products.
