ONEOK Inks $5.9B Deal With GIP to Expand Permian Presence

Core Viewpoint - ONEOK, Inc. is expanding its presence in the Permian and MidContinent basins through a $5.9 billion acquisition of midstream assets from Global Infrastructure Partners, which will enhance its position in the U.S. production pipeline and storage industry [1]. Group 1: ONEOK's Strategic Investments - ONEOK will acquire GIP's 43% stake in EnLink Midstream for $14.90 per unit, totaling approximately $3.3 billion in cash, along with GIP's equity interests in Medallion Midstream for $2.6 billion [2]. - The acquisitions are expected to increase ONEOK's capacity for moving and processing oil, gas, and natural gas liquids in the targeted basins [3]. Group 2: Industry Growth Prospects - The oil and gas production pipeline industry is capital-intensive, requiring substantial investments for pipeline construction and maintenance [4]. - The demand for natural gas in the U.S. is projected to rise due to the growth of natural gas-fired power plants and increasing LNG exports, benefiting ONEOK's investments in the Permian and Mid-Continent basins [5]. Group 3: Peer Company Insights - Kinder Morgan, Inc. is expanding its natural gas pipeline network, recently acquiring NextEra Energy Partners' pipelines for $1.82 billion [6]. - The Williams Companies, Inc. has increased its capacity by 50% over the past eight years, with a long-term earnings growth rate of 3.8% [7]. - MPLX LP plans to invest $1.1 billion in 2024, focusing on expansion initiatives, and has a long-term earnings growth rate of 8.5% [8][9]. Group 4: Stock Performance - ONEOK's shares have increased by 13.9% over the past three months, outperforming the industry's growth of 6.2% [10].