Making Gravy Ahead of the Holidays
Seems there’s no going cold turkey this Thanksgiving week when it comes to making billion-dollar pipeline deals. For ONEOK and EQT, this means making more 4Q gravy to further execute their strategies whether they be expansion opportunities or shedding debt before the holiday season wraps up.
Reese Energy Consulting today is following the latest from Tulsa-based midstream giant ONEOK, which in August snapped up a 43% controlling stake in Dallas-based EnLink Midstream’s natural gas and crude oil platforms, and Medallion Midstream’s crude gathering and transportation systems for a combined $5.9 billion. EnLink operates in the Permian, La., and Okla. The EnLink deal included 1.7 BCFD of gas processing capacity and 1.6 MMBD of crude oil gathering capacity in Permian assets. The Medallion purchase included 1,200 miles of oil gathering pipe with 1.3 MMBD capacity and 1.5 MMBbls of storage primarily in the Permian Midland.
Then, ONEOK made a surprise move last week by selling three natural gas pipelines far outside the Permian to DT Midstream for $1.2 billion. So, perhaps it comes as little surprise, ONEOK has now announced it will buy the whole EnLink Thanksgiving Day Meal for $4.3 billion. Pass the mashed potatoes.
Marcellus/Utica gas titan EQT, which bought back its 303-mile Mountain Valley Pipeline last March for $5.2 billion—and has been on a debt-slashing crusade ever since—has formed a midstream JV with PE firm Blackstone following talks in October. The MVP flows 2 BCFD of Appalachia gas produced by EQT to Mid-Atlantic and Southeast markets and is part of a $3.5 billion deal with Blackstone that includes non-controlling interests in the pipeline, a planned expansion, and the MVP Southgate projects.