ArcLight Capital Partners, LLC and affiliates (collectively, “ArcLight”) announced that it has completed the acquisition of a 25% equity interest in Gulf Coast Express Pipeline LLC (“GCX”) for $865 million from an affiliate of Phillips 66 (NYSE: PSX). Going forward, GCX will be jointly owned by subsidiaries of Kinder Morgan, Inc. (NYSE: KMI) and ArcLight. GCX will continue to be operated by a subsidiary of KMI.
GCX is a premier, 500-mile natural gas pipeline with approximately 2 Bcf/d of capacity that is underpinned by a high-quality array of shippers under long-term committed contracts. GCX provides critical residue gas takeaway service from the Permian Basin to key US Gulf Coast end-markets, including key growing demand regions such as the growing liquefied natural gas (“LNG”) export market in South Texas.
Since 2001, ArcLight has owned, controlled, or operated over 47,000 miles of electric and gas transmission, making it one of the largest private owners of natural gas related transmission infrastructure.
“As the U.S. seeks to meet the rapidly growing power demand needs associated with AI and data center infrastructure, we believe more natural gas related infrastructure, both power and midstream assets, will be needed to meet this objective. This acquisition builds on our history dating back to 2001 of investing in critical gas infrastructure, ability to be a value-added partner, and expands our strategic partnership with Kinder Morgan,” said Dan Revers, Founder of ArcLight.
“We believe GCX represents a critical-path, strategic natural gas infrastructure asset with opportunities for growth,” said Lucius Taylor, Partner at ArcLight. “As one of the largest, lowest cost transmission assets in the region, we believe GCX is well positioned to capitalize on the dual tailwinds of growing Permian production and long-term LNG, power, and industrial demand growth.”
Barclays Capital Inc. acted as financial advisor and Latham & Watkins LLP acted as legal counsel to ArcLight on the transaction.
