HOUSTON — Tulsa-based midstream partnership ONEOK Partners will pay $800 million for pipelines and other assets owned by Chevron Corp. that are primarily used to move natural gas liquids, the companies announced Tuesday.
The deal gives ONEOK an 80 percent stake in West Texas LPG Pipeline and a 100 percent interest in the Mesquite Pipeline, which together include 2,600 miles of NGL gathering pipelines from the Permian Basin in southeast New Mexico to Mont Belvieu, the NGL processing hub east of Houston (see a map of the system here).
ONEOK Partners will operate both pipelines. The remaining stake in West Texan LPG is owned by Texas-based Martin Midstream Partners LP.
“The partnership’s presence in the Permian Basin now is significantly stronger, and this acquisition establishes a new geographic region for natural gas liquids volume growth,” said Terry Spencer, president and chief executive of ONEOK Partners, in a statement.
The acquisition increases mileage in ONEOK’s NGL gathering system by more than 60 percent to 6,900 miles, the partnership said, and once the deal is complete it will be able to move nearly 40 percent more NGL than it did before — about 800,000 barrels per day across its entire network.
“This strategic acquisition immediately establishes ONEOK as a significant NGL service provider in the Permian Basin,” Spencer added.
He said by adding more assets in the Permian Basin to its portfolio the partnership is expanding its footprint and gaining opportunities to integrate different parts of the business.
Last month, ONEOK announced plans to invest between $480 million and $680 million over the next two years to build a natural gas plant and other infrastructure in Dunn County, North Dakota and Campbell County, Wyoming.
The partnership has announced plans to invest $8.3 billion to $9 billion from 2010 to 2016 on acquisitions and capital projects.
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