ONEOK Sells Natural Gas Pipe Systems to DT Midstream for $1.2B

ONEOK Completes Significant Natural Gas Pipeline Transaction

ONEOK, Inc. (NYSE: OKE) has made a remarkable strategic move to enhance its asset management by entering into an agreement to sell its wholly-owned interstate natural gas pipeline systems to DT Midstream, Inc. (NYSE: DTM). The total cash agreement is valued at approximately $1.2 billion, with customary adjustments anticipated.

Details of the Agreement

This transaction has been unanimously endorsed by the boards of directors of both ONEOK and DT Midstream. The sale encompasses three key interstate pipeline systems, which are pivotal in the energy infrastructure landscape. It is expected to finalize in the upcoming months, carefully navigating through various customary closing conditions, including gaining approval under the Hart-Scott-Rodino Act.

Pipeline Systems Included in the Sale

The acquisition includes vital natural gas pipeline systems:

• Guardian Pipeline, which is crucial for connecting to several pipelines across the Chicago Hub and local distribution companies.
• The Midwestern Gas Transmission system offers bidirectional flow and connections to several significant pipelines serving major shale regions.
• Viking Gas Transmission, facilitating connections to critical areas at the U.S. border with Canada.

These systems will allow DT Midstream to enhance the efficiency and effectiveness of its operations while ensuring the continued delivery of essential natural gas transportation services.

Impact on ONEOK

Upon the successful closure of this transaction, ONEOK expects to reap substantial financial benefits. The net proceeds from the sale are anticipated to provide greater financial flexibility and support ONEOK's ongoing deleveraging efforts. The company aims to reach a targeted leverage ratio of 3.5 times by 2026, a crucial aspect of its financial strategy moving forward.

ONEOK's Commitment to Energy Infrastructure

As a major player in the energy infrastructure sector, ONEOK remains focused on delivering innovative and responsible energy solutions. The company operates an extensive pipeline network exceeding 50,000 miles, providing gathering, processing, transportation, and storage services that are fundamental to meeting both domestic and international energy demands. This divestiture marks a step towards refining their portfolio to reflect their commitment to excellence and safety in energy management.

About ONEOK and Its Operations

ONEOK is renowned as a leading midstream service provider in North America, facilitating the supply of natural gas and other energy products that are essential in today’s evolving energy landscape. The company's operations support energy security and strive to meet the increasing global demand for reliable energy resources.

Additionally, as of recent months, ONEOK has a significant ownership stake in EnLink Midstream, indicating its expansive reach within the energy market. This relationship supports its integrated approach to midstream services, ensuring comprehensive engagement in the energy supply chain.

Frequently Asked Questions

What is the significance of the agreement between ONEOK and DT Midstream?

This agreement signifies ONEOK's strategy to optimize its asset portfolio and enhance its financial flexibility through the sale of its pipeline systems.

What are the financial details of the sale?

The sale is valued at approximately $1.2 billion, subject to customary adjustments, representing a substantial understanding between both companies.

Which pipeline systems are included in the sale?

The sale includes Guardian Pipeline, Midwestern Gas Transmission, and Viking Gas Transmission system, collectively boosting DT Midstream's operational capabilities.

When is the transaction expected to close?

The transaction is anticipated to finalize in the fourth quarter of 2024, following the fulfillment of customary closing conditions.

How does this sale impact ONEOK's strategy?

The sale aligns with ONEOK's strategic focus on enhancing its financial position while reinforcing its commitment to being a leading provider of energy infrastructure in North America.

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