ONEOK has closed its $4.43bn cash acquisition of Brazos Midstream's natural gas gathering and processing assets in the Permian Midland Basin, lifting its total Midland Basin processing capacity to roughly 2.3 bcf/d — a more than twofold increase.

The deal, first announced in August 2026, adds about 700 miles of gathering pipelines and 1.1 billion cubic feet per day of combined processing capacity, with additional capacity under construction to keep pace with producer demand.

What does the acquisition deliver?

The acquired system covers roughly 600,000 dedicated acres secured under long-term fixed-fee contracts. The majority of those contracts have more than 12 years remaining on their terms, giving ONEOK a multi-decade feedstock base across the Midland Basin.

With Brazos' assets and projects already under way now in the fold, ONEOK operates one of the larger integrated gathering and processing platforms in the Midland side of the Permian.

ONEOK president and CEO Pierce Norton II said: "The completion of this acquisition further strengthens our Permian Midland Basin position with a premier gathering and processing platform supported by high-quality acreage, long-term contracts and some of the basin's leading producers."

He added: "These assets provide significant opportunities for future growth and enhance our ability to connect increasing natural gas and NGL [natural gas liquids] production across ONEOK's integrated system."

How is ONEOK financing it?

The company has arranged a $9bn non-voting minority equity investment to fund the transaction. The structure carries a capped internal rate of return of 7% for the first nine years — below ONEOK's cost of publicly traded equity, according to the company.

Any distributions above that 7% cap will reduce the outstanding minority equity capital balance and increase the value attributable to holders of ONEOK common shares.

In parallel, ONEOK plans to retire about $5bn of existing debt through repayments, make-whole calls and a tender offer for selected senior notes, many of which currently trade below par value. The company expects the moves to bring its pro forma 2027 leverage ratio down to approximately 3.25 times debt-to-EBITDA.

Where does this leave Brazos Midstream?

Earlier in the year, Brazos Midstream sold its Delaware Basin assets to Western Midstream Partners. That separate transaction comprised around 900 miles of gathering pipeline and a processing complex with 460 million cubic feet per day of capacity.

With the Midland sale now closed, Brazos has exited both halves of its Permian footprint.

Brazos Midstream CEO Brad Iles said: "This transaction represents an important milestone for Brazos and is a testament to the best-in-class assets our team has built in the Midland Basin."

He added: "We appreciate ONEOK's collaborative approach and are confident these assets are well positioned for continued growth under their ownership."

What to watch next

The watch item is execution: the pace of the $5bn debt retirement, the tender results on the selected senior notes, and whether the capacity now under construction on the acquired system comes online on schedule as Midland producers push associated gas volumes higher.