Kinetik Divests Stake in Gulf Coast Express Pipeline to ArcLight Affiliate for $540 Million
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Kinetik has completed the sale of a 16 percent interest in the Gulf Coast Express Pipeline (GCX) in the Permian basin, Texas to an ArcLight Capital affiliate.
The deal consideration involved an upfront cash payment of $510 million and an additional deferred $30 million cash payment due upon making a final investment decision on the pipeline capacity expansion project.
The deal between the parties was signed in May 2024.
The stake sale in the GCX project also forms part of Kinetik’s strategy to strengthen its position as a pure-play midstream company in the Delaware Basin.
Proceeds from the sale will be used by Kinetik to fund the acquisition of Durango Permian.
Kinetik will acquire Durango’s assets in New Mexico, including 3,862km of gas-gathering pipelines and a processing capacity of 220 million cubic feet per day (mft³/d).
The acquisition also includes the Kings Landing project, a 200mft³/d greenfield processing complex in Eddy County, New Mexico, which is set for completion in April 2025.
Proceeds from the latest deal are earmarked for general corporate purposes, including capital investments to support a new 15-year gas gathering and processing agreement in Eddy County, New Mexico.
Commissioned in 2019, the 853 km-long Gulf Coast Express project can transport up to two billion cubic feet per day of natural gas.
In 2022, ArcLight acquired Targa Resources’ wholly-owned subsidiary, which owns a 25 percent stake in the Gulf Coast Express Pipeline.
Kinetik is a fully integrated, pure-play, permian-to-gulf coast midstream company operating in the Delaware Basin. Kinetik is headquartered in Houston and Midland, Texas. Kinetik provides comprehensive gathering, transportation, compression, processing, and treating services for companies that produce natural gas, natural gas liquids, crude oil, and water.
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