MPLX has entered into a definitive agreement to acquire Northwind Delaware Holdings from Five Point Infrastructure for a cash consideration of $2.37bn.
The acquisition is poised to be immediately accretive to MPLX’s distributable cash flow and represents a sevenfold multiple based on the anticipated earnings before interest, taxes, depreciation and amortisation (EBITDA) for 2027.
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The deal, which MPLX plans to fund through debt, also includes a mid-teen unlevered return, inclusive of the capital spend for ongoing expansion activities.
Northwind Delaware, established by Five Point in 2022, addresses a critical challenge in the Northern Delaware Basin by providing essential sour gas services.
The lack of capacity for treating sour natural gas, acid-gas injection and sequestration has historically restricted upstream development in the region.
Northwind’s operations also align with customer sustainability goals by sequestering and capturing CO₂ from the natural gas stream.
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By GlobalDataCurrently, Northwind’s infrastructure encompasses more than 200,000 dedicated acres, over 200 miles of pipelines, and two carbon sequestration and acid gas injection wells with 20 million cubic feet per day (mcf/d) of combined capacity.
A third permitted well, set to be completed in 2026, will increase total capacity to 37mcf/d.
The system’s sour gas treating capacity is expected to rise from 150mcf/d to 440mcf/d by the second half of 2026, backed by minimum volume commitments from leading regional producers.
The acquisition will enable MPLX to provide prompt sour gas solutions in south-east New Mexico, US, offering access to up to 400mcf/d of incremental gas for processing and up to 70,000 barrels per day (bpd) of new natural gas liquids volumes. This move is set to expedite MPLX’s growth opportunities in the region.
Five Point Infrastructure CEO and managing partner David Capobianco said: “This transaction is a clear validation of our investment thesis regarding the need for critical infrastructure development across the nation’s most productive energy basins.”
Anticipated to close in the third quarter of this year, the transaction is subject to customary closing conditions, encompassing antitrust clearance under the Hart-Scott-Rodino Act of 1976.
Piper Sandler & Co and Latham & Watkins advised the seller on financial and legal matters, respectively.
Earlier in the year, Five Point Infrastructure was in talks over the potential sale of the Permian Basin gas infrastructure operator Northwind Midstream.
