Oklahoma midstream service provider ONEOK has agreed to acquire Easton Energy’s Gulf Coast Liquids Pipeline System for around $280m, subject to customary adjustments.
The acquisition includes around 450 miles (724km) of pipelines that carry natural gas liquids (NGL) and hydrocarbons throughout the Texas and Louisiana Gulf Coast midstream corridors.
The Houston, Texas-based midstream company will retain and continue to operate its NGL and olefins storage business in Markham, Texas.
The transaction is expected to be completed mid-year 2024, subject to customary conditions including termination of the waiting periods under the Hart-Scott-Rodino Act.
ONEOK intends to connect the acquired pipelines to its Mont Belvieu, Texas NGL infrastructure and Houston refined products and crude oil infrastructure, to advance commercial synergies.
ONEOK president and CEO Pierce Norton II said: “This strategic acquisition provides the quickest pipeline connectivity to and within the critical supply and demand centres for our NGLs, refined products and crude oil assets in the Gulf Coast.
“We expect that this acquisition will accelerate the ability to capture commercial synergies related to our recent Magellan acquisition and future earnings growth.”
Easton is a portfolio company of Cresta Fund Management (Cresta), a Dallas-based private equity fund that manages over $1.6bn of capital.
The company owns salt dome storage infrastructure, located between major NGL and petrochemical markets in Mont Belvieu and Corpus Christi, Texas.
The infrastructure includes brine handling facilities and multiple salt dome wells with around 40 million barrels of NGL and olefins storage capacity.
Cresta managing partner Chris Rozzell said: “This transaction confirms the potential Cresta saw in these pipelines when we acquired them in 2018.
“We are enthusiastic about Easton’s sharpened focus on its storage business and are excited about its ability to provide services to a variety of different NGL customers.”
Easton CEO Jerry Cardillo said: “These pipelines are a critical piece of the U.S. Gulf Coast NGL and hydrocarbon value chain. This transaction recognizes value for our customers, shareholders, and our business partners. We will now pivot our focus to our remaining business, our NGL and olefins storage business.”
