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ONEOK Finalizes Purchase of Magellan Midstream Partners
09/27/2023![ONEOK-Finalizes-Purchase-of-Magellan-Midstream-Partners](https://images2.rextag.com/public/blog/187Blog_ONEOK Completes Acquisition of Magellan Midstream.png)
The merger between ONEOK and Magellan received approval from Magellan shareholders, securing just 55% of the total votes at Magellan’s meeting on Sept. 21.
ONEOK Inc. has successfully concluded the acquisition of Magellan Midstream Partners LP on Sept. 25. The deal will bring together their respective assets and expertise, resulting in a powerful entity boasting an extensive network of approximately 25,000 miles of pipelines primarily focused on transporting liquids.
ONEOK Inc. is merging with Magellan Midstream Partners LP, forming a significant midstream organization with a valuation of $60 billion. ONEOK is set to procure all the outstanding units of Magellan Midstream in a cash-and-stock deal valued at $18.8 billion, inclusive of the assumed debt.
With this acquisition, ONEOK Inc. integrates refined products and crude oil transportation assets into its existing natural gas and NGL portfolio. This amalgamation has resulted in over 50,000 miles of pipeline infrastructure and ties to nearly half of the U.S.' refining capability, as stated on ONEOK's website.
ONEOK Envisions a Prosperous Future Post-Merger
- The merger is set to forge a predominant figure in the midstream sector, flaunting a combined market capitalization of roughly $40 billion.
- The entity will wield control over more than 25,000 miles of liquid transportation pipelines and will have substantial assets nestled in the Gulf Coast and Midcontinent zones, solidifying its operational footprint.
- The alliance harbors the potential to yield annual synergies surmounting $400 million in the ensuing two to four years. According to Truist analysts, the amalgamation of complementary assets could culminate in operational synergies amounting to a minimum of $200 million post-integration.
- ONEOK envisions the pact bringing forth a favorable influence on the earnings per share (EPS) commencing in 2024. The company projects an annual EPS accretion oscillating between 3% to 7% from 2025 to 2027, highlighting the merger’s contribution to financial growth.
- The realized synergies are predicted to translate into savings of at least $200 million annually, accentuating the economic viability of the merger.
"This marks a pivotal day for both Tulsa and the sector, as we merge the proficient teams of ONEOK and Magellan, envisioning our collective future." He continued, "Our broader product platform will uncover new avenues in ONEOK's fundamental businesses and augment the robustness of our enterprise. We are dedicated to orchestrating a seamless transition with a focus on realizing the myriad advantages of this amalgamation for our clients, employees, and shareholders."
Pierce H. Norton II, the president and CEO of ONEOK
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Revolutionary Merger: ONEOK Set to Unleash $18.8 Billion Acquisition of Magellan Midstream Partners
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/153Blog_ONEOK to Acquire Magellan Midstream $18.8 Billion Assets in Tulsa, Oklahoma.png)
ONEOK Inc. and Magellan Midstream Partners LP have announced a merger agreement that will result in the formation of a formidable midstream company headquartered in Tulsa, Oklahoma. The deal will bring together their respective assets and expertise, resulting in a powerful entity boasting an extensive network of approximately 25,000 miles of pipelines primarily focused on transporting liquids.
Occidental's Asset Cuts After CrownRock's $12 Billion Deal
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/210Blog_Occidental's $12 billion acquisition of CrownRock.png)
Occidental Petroleum is expanding its reach in the Midland Basin and targeting deeper drilling in the Barnett area through its significant $12 billion purchase of CrownRock LP. CrownRock, a collaboration between CrownQuest Operating LLC and Lime Rock Partners, is recognized for its prime land holdings in the Permian Basin. This acquisition brings over 94,000 net acres and 1,700 undeveloped drilling spots in the Midland Basin to Occidental's portfolio.
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The pipeline industry in the USA faced and still faces a range of regulatory challenges, including permitting delays, environmental requirements, and public opposition to pipeline projects. In recent years, pipeline projects like the Keystone XL and Dakota Access pipelines had legal and regulatory obstacles that delayed or canceled their construction. Keystone XL Pipeline, proposed by TransCanada in 2008, aimed to transport crude oil from Canada (around Calgary and Edmonton) to refineries on the Gulf Coast (Port Arthur). The project faced opposition from environmental groups and indigenous communities, who argued that it would contribute to climate change and pose a risk to water resources. In 2015, President Obama rejected the project, citing concerns about its environmental impact. However, in 2017, President Trump revived the project, leading to further legal challenges. In June 2021, U.S. President Joe Biden officially canceled the project on his first day in office.
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The renewable natural gas (RNG) industry in the United States is showing promising signs of growth. As of 2019, the U.S. consumed 261 billion cubic feet (BCF) of RNG, primarily utilized by independent power producers, electric utilities, and various commercial and industrial entities. However, this figure represents only a small fraction of its potential. Research indicates that the U.S. could theoretically produce up to 2,200 BCF of RNG through anaerobic digestion alone, which would equate to about 11% of daily national natural gas consumption.
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