ArcLight Capital Partners has announced the acquisition of a 25% equity interest in the Gulf Coast Express Pipeline (GCX) from a Phillips 66 affiliate for $865m.

This acquisition will see GCX jointly owned by subsidiaries of Kinder Morgan and ArcLight, with operations managed by a Kinder Morgan subsidiary.

GCX is a 500-mile (804.6km) natural gas pipeline with a capacity of approximately two billion cubic feet per day (bcf/d). It is supported by long-term contracts with a range of shippers.

The pipeline provides essential gas takeaway services from the Permian Basin to key US Gulf Coast markets including the growing liquefied natural gas (LNG) export market in South Texas.

ArcLight founder Dan Revers said: “As the US seeks to meet the rapidly growing power demand needs associated with AI and data centre 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.”

ArcLight has been operating in the energy infrastructure sector since 2001, owning, controlling or operating more than 47,000 miles of electric and gas transmission infrastructure.

This acquisition further strengthens its position as one of the “largest” private owners of natural gas transmission infrastructure.

Barclays Capital served as the financial advisor for the transaction, with Latham & Watkins providing legal counsel to ArcLight.

Arclight partner Lucius Taylor said: “We believe GCX represents a critical-path, strategic natural gas infrastructure asset with opportunities for growth.

“As one of the largest, lowest-cost transmission assets in the region, we believe GCX is well positioned to capitalise on the dual tailwinds of growing Permian production and long-term LNG, power, and industrial demand growth.”

In June last year, an ArcLight affiliate acquired a 16% interest in GCX from Kinetik for $510m.