ONEOK to Acquire Brazos Midland Gas Assets for $4.425 Billion

Charles Kennedy Sun, August 30, 2026 at 7:35 PM PDT 3 min read

ONEOK has agreed to acquire Brazos Midstream's natural gas gathering and processing assets in the Permian Basin's Midland sub-basin for $4.425 billion in cash, expanding the midstream operator's footprint in one of the largest U.S. oil and gas producing regions.

Financing Structure

The acquisition will be funded as part of a separate $9 billion nonvoting minority equity investment from funds and affiliates managed by Apollo Global Management. ONEOK plans to use roughly $5 billion of the Apollo proceeds to extinguish existing debt, while the remainder will fund the Brazos acquisition.

The structure allows ONEOK to finance the transaction without issuing common equity. The company said the combination of the Apollo investment and planned debt reduction is expected to bring its pro forma 2027 debt-to-EBITDA ratio to approximately 3.25 times.

Asset Overview

Brazos' Midland Basin system is supported by:

• Approximately 600,000 dedicated acres under fixed-fee contracts
• A weighted average remaining contract term exceeding 12 years
• Producers including ExxonMobil, Diamondback Energy, and Double Eagle
• 14 active drilling rigs currently supporting the system

Following completion of the Cassidy II processing plant—expected in the third quarter of 2027—the acquired system will comprise:

• Approximately 700 miles of gathering infrastructure
• 1.2 billion cubic feet per day (Bcf/d) of gas processing capacity
• Operations across seven Midland Basin counties

Strategic Impact

ONEOK said adding the Brazos assets would more than double its Midland Basin processing capacity to approximately 2.3 Bcf/d, including facilities currently under construction. The company expects to link those volumes with its broader natural gas liquids infrastructure, including the West Texas NGL Pipeline and its Medford fractionation project.

Expansion History

The acquisition continues a multiyear expansion of ONEOK's U.S. midstream portfolio:

• 2023: Completed $14.1 billion acquisition of Magellan Midstream Partners, adding major crude oil and refined-products infrastructure
• 2024: Paid approximately $2.6 billion for Medallion Midstream and $3.3 billion for Global Infrastructure Partners' controlling interest in EnLink Midstream
• January 2025: Acquired EnLink's remaining publicly held interests

Financial Outlook

ONEOK estimates the Brazos purchase price at:

• Approximately 7.5 times projected 2027 EBITDA, including roughly $80 million in anticipated annual synergies
• Falling to approximately six times projected 2028 EBITDA

The company also expects the acquisition to be immediately accretive to earnings and free cash flow per share.

Timeline and Approvals

The Brazos acquisition has been approved by ONEOK's board and is expected to close in the fourth quarter of 2026, subject to customary conditions including U.S. antitrust clearance. The Apollo investment is separately expected to close in the first half of September.

By Charles Kennedy for Oilprice.com

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