UNITED STATES OF AMERICA —US energy infrastructure enterprise ONEOK has signed a definitive agreement to acquire the Permian Midland Basin natural gas gathering and processing assets of Brazos Midstream for $4.425 billion in cash. The acquisition will be supported by a $9 billion nonvoting minority equity investment from funds managed by Apollo, with ONEOK utilizing $5 billion of the equity proceeds to extinguish existing corporate debt. The asset transaction is scheduled to complete in the fourth quarter of 2026, subject to regulatory clearances, while the equity investment is targeted to close in September 2026. ONEOK is a major American midstream service provider managing natural gas gathering, processing, and natural gas liquids transportation networks. Brazos Midstream is a private energy company specializing in crude oil and natural gas gathering across the Permian Basin. Apollo is an international alternative asset manager providing specialized credit, private equity, and infrastructure capital.
This transaction substantially expands ONEOK's midstream footprint across core counties in the Permian Midland Basin, effectively doubling its local natural gas processing capacity to 2.3 billion cubic feet per day. The acquired assets encompass approximately 700 miles of gathering pipelines, 1.2 billion cubic feet per day of processing infrastructure, and nearly 600,000 dedicated acres secured under long-term fee-based contracts. Simultaneously, the financial architecture provides a structured capital solution: the $9 billion equity funding carries a capped internal rate of return, structured to step down as operational cash distributions reduce the outstanding investment balance over time. Deploying $5 billion toward debt repayment allows ONEOK to accelerate balance sheet deleveraging to 3.25 times debt-to-EBITDA without issuing common shares.
The deal reflects broader structural consolidation and strategic capital discipline across the North American midstream sector. As raw natural gas volumes in the Permian Basin continue to expand alongside crude production, midstream operators are prioritizing wellhead-to-gulf coast integration to capture multi-stage throughput margins. Linking gathering systems directly with downstream transportation and fractionation assets minimizes regional takeaway bottlenecks for upstream producers. Furthermore, utilizing nonvoting structured equity highlights an evolving trend among public energy companies to execute large-scale portfolio expansions while maintaining strict balance sheet constraints.
For energy market participants and institutional investors, the transaction enhances ONEOK's long-term cash flow predictability by locking in extended acreage dedications with major Permian producers. Integrating the Brazos assets with ONEOK's existing West Texas NGL pipelines and fractionation facilities creates operational synergies and capital efficiencies. For regional upstream producers, the expanded processing network provides higher operational reliability. Additionally, the rapid reduction in corporate debt improves financial flexibility, supporting future capital allocation toward dividend growth and share repurchases.
