US natural gas growth fuels ONEOK’s $4.42 billion pipeline buyout

America’s pipeline giants are on a buying spree, and the reason comes down to a simple bet: the country is about to need a lot more natural gas. US natural gas growth is accelerating on two fronts at once — artificial intelligence data centers hungry for power and a booming overseas export market — and that combination is now reshaping who owns the pipes, plants and gathering lines that move gas from the ground to the customer.

Key takeaways

• ONEOK bought Brazos Midstream’s Permian Basin assets for $4.42 billion this week, its latest move to grow scale in West Texas.
• Williams paid $5.5 billion for Momentum Midstream’s Texas and Louisiana gathering and processing facilities, while Western Midstream spent $1.6 billion on Brazos’ Delaware Basin assets in May.
• US natural gas output has more than doubled since 2006 and could climb another 35% by 2050, according to Department of Energy projections cited by Fortune.
• The US already produces roughly a quarter of the world’s natural gas and leads global LNG exports, despite only starting to ship LNG a decade ago.
• Apollo Global Management is putting $9 billion into ONEOK to help fund the Brazos deal and pay down debt from earlier acquisitions.

Surging US Natural Gas Production and Demand

US natural gas production is set to keep climbing for decades, driven by two forces that rarely converge this cleanly: artificial intelligence infrastructure and liquefied natural gas exports. Twenty years into the shale boom that began in 2006, domestic output has more than doubled after three flat decades, and the Department of Energy expects it to rise another 35% by 2050 — reaching roughly 150 billion cubic feet per day, up from 50 Bcf/d two decades ago.

That growth trajectory already puts the US in a league of its own. The country now produces about a quarter of the world’s natural gas, nearly double second-place Russia, and has become the top LNG exporter globally even though American LNG shipments only began ten years ago.

Doubling Production Since 2006 With 35% Growth Projected by 2050

The numbers tell a story of a market that went from stagnant to explosive. Production stayed flat for more than 30 years before the shale revolution took hold, and the pace since 2006 has been steady enough that forecasters now treat continued expansion as the baseline case rather than the exception.

Key Drivers: AI Data Centers and LNG Exports in Texas and Louisiana

Two demand sources are doing the heavy lifting. LNG export terminals along the Texas and Louisiana Gulf Coast keep expanding, and at the same time, data center developers are choosing the same two states for new AI infrastructure — not by coincidence, but because both industries want to be close to abundant gas supply and favorable regulatory environments.

Industry Consolidation Through Major Pipeline Acquisitions

The scramble for gas supply has triggered one of the busiest stretches of pipeline dealmaking in years, with big public companies buying out smaller private operators to lock in scale before the next wave of demand arrives.

ONEOK’s $4.42 Billion Purchase of Brazos Midstream’s Permian Basin Assets

Tulsa-based ONEOK closed its purchase of Brazos Midstream’s Permian Basin assets this week for $4.42 billion, adding 700 miles of gathering lines and 1.2 Bcf/d of gas processing capacity in the Midland Basin. London Spivey, an energy analyst at East Daley Analytics, told Fortune the company is getting solid value while expanding its footprint in one of the Permian’s more mature producing areas.

“They’re getting the gas to help feed that AI demand to profit along every step of the value chain,” Spivey said, describing how ONEOK now controls gas from the wellhead through processing and onto its own pipelines, whether the end market is a data center or an LNG terminal.

Williams’ $5.5 Billion Acquisition of Momentum Midstream Pipelines

Just before the Brazos deal, pipeline giant Williams acquired Momentum Midstream along with its Texas and Louisiana gathering and processing facilities for $5.5 billion — one of the largest midstream transactions of the year and a clear signal that competitors are racing to match ONEOK’s scale.

Western Midstream’s $1.6 Billion Purchase of Brazos’ Delaware Basin Facilities

Western Midstream got there first, paying $1.6 billion in May for Brazos’ Delaware Basin facilities in the western lobe of the Permian. Together, the three deals show Brazos essentially splitting itself between two rival buyers within months.

ONEOK’s Growth via Magellan, EnLink and Medallion Midstream Acquisitions

ONEOK didn’t arrive at this scale overnight. In 2023, it bought Magellan Midstream for $18.8 billion including debt, and in 2024 it added both EnLink Midstream and Medallion Midstream. The Magellan and Medallion deals leaned toward crude oil and refined products, while EnLink brought heavy gas infrastructure across Texas, Louisiana and Oklahoma. CEO Pierce Norton called EnLink “the perfect fit.” Spivey framed the broader pattern bluntly: “It highlights the trend that we’ve been seeing across the entire industry of these big publics going in and buying out all these privates and consolidating.”

Strategic Infrastructure Projects and Financial Backing

Buying assets is only half the equation — moving the gas to where it’s needed is the other half, and that’s where new pipeline capacity and outside capital come in.

Eiger Express Pipeline to Boost Transport Capacity by 2028

Separate from the Brazos acquisition, ONEOK and its partners are building the 450-mile Eiger Express Pipeline to carry gas from the Permian to the Houston area, with completion expected in 2028. Customer demand was strong enough that the partners boosted planned capacity from 2.5 Bcf/d to more than 3.5 Bcf/d. Norton said the project is one of several long-haul lines under development between West Texas and the Gulf Coast meant to fix a bottleneck that has, at times, pushed regional spot prices negative — forcing some producers to pay just to have excess gas hauled away. “The problem with the gas price in the Permian is going to get solved when all these pipes get built out,” he said.

Apollo Global Management’s $9 Billion Investment in ONEOK

Prior acquisitions had loaded ONEOK with debt, so the company turned to outside capital to fund the Brazos purchase. Through a $9 billion investment, Apollo Global Management is acquiring a minority stake in ONEOK, split between $4 billion earmarked for the Brazos deal and $5 billion directed toward reducing existing debt.

Industry Perspectives and Regional Focus

Why does this matter beyond one company’s balance sheet? Because the consolidation wave signals that major players expect demand growth to be durable, not a short-term spike tied to a single data center project or export contract.

ONEOK CEO on Growing Gas Demand and Texas Focus

Norton, speaking to Fortune before the Brazos deal closed, said more drilling will eventually be needed across the country, which could push prices higher over time. “The demand is going to be there, and it’s going to be driven by LNG exports and the AI data centers,” he said. He added that he’s in constant contact with data center developers and that “there seems to really be a focus on Texas right now.” Norton also pointed out that as the oil-heavy Permian matures and depletes, its output naturally shifts toward a higher gas ratio — meaning gas production could keep climbing even without new drilling activity, simply because of how the basin ages.

Analyst Insights on Consolidation and Integrated Value Chain Strategy

Norton described ONEOK’s broader philosophy this way: “Our little motto is that we want to touch as many molecules as we can for as long as we can… It’s that integrated value chain.” Spivey framed the competitive dynamics in similar terms from the analyst’s side: “They’re picking the basins that they want to fight for, and they’re piecemeal acquiring as they’re trying to get dominant.” The Haynesville Shale in Louisiana and East Texas, along with the Permian, are positioned to ramp up output as pipeline capacity catches up with demand — and the companies that control the most infrastructure along that chain stand to capture the most value as AI and LNG demand keep climbing.

FAQ

Why is US natural gas production expected to keep rising?

US natural gas production has more than doubled since 2006 and could rise 35% through 2050 due to increasing demand from AI data centers and LNG exports.

What major acquisitions have pipeline companies made recently?

ONEOK acquired Brazos Midstream’s Permian Basin assets for $4.42 billion; Williams bought Momentum Midstream’s Texas and Louisiana facilities for $5.5 billion; Western Midstream purchased Brazos’ Delaware Basin assets for $1.6 billion.

How is ONEOK financing its recent acquisitions?

Apollo Global Management invested $9 billion in ONEOK, allocating $4 billion for Brazos Midstream assets and $5 billion for debt reduction.

What infrastructure projects are underway to support gas transport?

ONEOK and partners are building the 450-mile Eiger Express Pipeline, with capacity expanded to over 3.5 Bcf/d, expected online in 2028 to alleviate transport bottlenecks.

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Article produced with the assistance of artificial intelligence and reviewed by the editorial team.