Easton Energy to sell Gulf Coast Liquids Pipeline System to ONEOK for $280m

Easton Energy, a Houston-based midstream company, has announced an agreement to sell its Gulf Coast Liquids Pipeline System to ONEOK, Inc. for approximately $280 million. This transaction is subject to customary price adjustments and conditions, including termination or expiration of the waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act.

The pipeline system being sold comprises approximately 450 miles of natural gas liquids (NGL) and hydrocarbon pipelines located throughout the Texas and Louisiana Gulf Coast midstream corridors. These pipelines are integral to the NGL and hydrocarbon value chain in the U.S. Gulf Coast.

Strategic Significance for Easton Energy

G.R. “Jerry” Cardillo, Chief Executive Officer of Easton Energy, stated, “These pipelines are a critical piece of the U.S. Gulf Coast NGL and hydrocarbon value chain. This transaction recognizes value for our customers, shareholders, and our business partners. We will now pivot our focus to our remaining business, our NGL and olefins storage business.”

Easton Energy to sell its Gulf Coast Liquids Pipeline System to ONEOK for $280 million, enhancing operational focus and strategic connectivity.

Easton Energy, a portfolio company of Cresta Fund Management, will retain and continue operating its NGL and olefins storage business located in Markham, Texas. This infrastructure includes brine handling facilities and multiple salt dome wells with approximately 40 million barrels of storage capacity.

Chris Rozzell, Managing Partner at Cresta Fund Management, commented, “This transaction confirms the potential Cresta saw in these pipelines when we acquired them in 2018. We are enthusiastic about Easton’s sharpened focus on its storage business and are excited about its ability to provide services to a variety of different NGL customers.”

Strategic Significance for ONEOK

ONEOK, Inc. plans to integrate the acquired pipeline system with its existing infrastructure in Mont Belvieu, Texas, and Houston. Pierce H. Norton II, President and Chief Executive Officer of ONEOK, stated, “This strategic acquisition provides the quickest pipeline connectivity to and within the critical supply and demand centers for our NGLs, refined products, and crude oil assets in the Gulf Coast. We expect that this acquisition will accelerate the ability to capture commercial synergies related to our recent Magellan acquisition and future earnings growth.”

Transaction Timeline and Conditions

Both Easton Energy and ONEOK expect to close the transaction by mid-year 2024. The closing is subject to customary conditions, including the termination or expiration of the waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act.

The sale of Easton Energy’s Gulf Coast Liquids Pipeline System to ONEOK represents a strategic move for both companies. Easton can now concentrate on its core storage business, while ONEOK enhances its pipeline connectivity and operational synergies in the Gulf Coast region. This transaction highlights the ongoing consolidation and strategic realignment in the midstream energy sector, focusing on maximizing asset value and improving operational efficiency.