ONEOK said on Sunday it has agreed to buy Brazos Midstream’s Permian Midland Basin natural gas gathering and processing assets for around $4.43 billion, more than doubling the U.S. pipeline operator’s processing capacity in the region.
The acquisition comes as pipeline operators in the U.S. are benefiting from increased oil and gas output in the Permian Basin, and rising natural gas demand amid record LNG exports.
The deal, which is expected to close in the fourth quarter of 2026, is also expected to immediately add to earnings per share and free cash flow for ONEOK, the company said.
ONEOK said the acquisition would be funded through a $9 billion non-voting minority equity investment from funds and affiliates managed by Apollo Global Management.
The acquired Brazos Midland assets will add to ONEOK’s existing Permian Basin platform, which is currently supported by 14 active drilling rigs from leading Permian producers including ExxonMobil, Diamondback Energy and Double Eagle.
ONEOK, which transports natural gas, natural gas liquids, refined products and crude oil through its 60,000-mile-long network of pipelines, said Apollo will invest $9 billion in exchange for a Class B interest in a newly formed holding company, ONEOK Holdings, L.L.C.
The Tulsa, Oklahoma-based company said it intends to extinguish about $5 billion of existing debt, in addition to funding the purchase.
(Reporting by Sumedha Mukherjee in Bengaluru; Editing by Chris Reese and Bill Berkrot)