US midstream operator ONEOK has completed its previously announced acquisition of Brazos Midstream’s natural gas gathering and processing assets in the Permian Midland Basin for approximately $4.43bn in cash.
The transaction, announced in August 2026, is set to significantly increase ONEOK’s integrated gathering and processing platforms in the Midland Basin.
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The acquired infrastructure spans approximately 700 miles of gathering pipelines and offers 1.1 billion cubic feet per day (bcf/d) of combined processing capacity, with further capacity being built to keep pace with producer demand.
With the addition of Brazos Midstream’s assets and projects already under way, ONEOK’s total Midland Basin processing capacity has risen to around 2.3bcf/d, a more than twofold increase.
The acquired system covers roughly 600,000 dedicated acres secured through long-term fixed-fee contracts, the majority of which have more than 12 years remaining on their terms.
ONEOK president and CEO Pierce Norton II said: “The completion of this acquisition further strengthens our Permian Midland Basin position with a premier gathering and processing platform supported by high-quality acreage, long-term contracts and some of the basin’s leading producers.
“These assets provide significant opportunities for future growth and enhance our ability to connect increasing natural gas and NGL [natural gas liquids] production across ONEOK’s integrated system.”
To finance the acquisition, ONEOK has arranged a $9bn non-voting minority equity investment.
This investment features a capped internal rate of return of 7% for the first nine years, below the company’s cost of publicly traded equity.
Any distributions exceeding this rate will reduce the outstanding minority equity capital balance and increase the value attributable to holders of ONEOK common shares.
In conjunction with the acquisition, ONEOK plans to retire around $5bn of existing debt through repayments, make-whole calls, and a tender offer for selected senior notes, many of which are currently trading below par value.
The company expects this to bring its pro forma 2027 leverage ratio down to approximately 3.25-times debt-to-earnings before interest, taxes, depreciation and amortisation.
Earlier in the year, Brazos Midstream sold its Delaware Basin assets to Western Midstream Partners.
The Delaware Basin sale comprised around 900 miles of gathering pipeline and a processing complex with 460 million cubic feet per day of capacity.
Brazos Midstream CEO Brad Iles said: “This transaction represents an important milestone for Brazos and is a testament to the best-in-class assets our team has built in the Midland Basin.
“We appreciate ONEOK’s collaborative approach and are confident these assets are well positioned for continued growth under their ownership.”
