Enterprise to Acquire Occidental's Gas Gathering Affiliate for $580M, Plans New Midland Basin Processing Plant

Enterprise Products Partners has agreed to acquire Occidental's gas gathering affiliate in the Midland Basin for $580 million, expanding its footprint and enhancing its natural gas gathering capacity. The deal includes 200 miles of pipelines and a new natural gas processing plant with a capacity of 300 million cubic feet per day to be operational by Q4 2026. This acquisition aligns with the company's growth strategy, which includes planned capital expenditures of $4.0 billion to $4.5 billion for 2025 and $2.2 billion to $2.5 billion for 2026.

Enterprise Products Partners L.P. (EPD) has announced a significant expansion of its operations in the Midland Basin, a key region within the Permian Basin. The company has entered into definitive agreements to acquire a natural gas gathering affiliate of Occidental for $580 million [1]. This acquisition is set to bolster EPD's midstream infrastructure and support the region's burgeoning production growth.

The deal includes the integration of approximately 200 miles of natural gas gathering pipelines that have been servicing Occidental’s production activities. Additionally, EPD will gain access to over 1,000 drillable locations on a 73,000-acre plot, providing long-term visibility into the area's development potential [1]. To complement this acquisition, EPD is also embarking on a substantial organic investment: the construction of a new natural gas processing plant named Athena. This state-of-the-art facility is designed to process 300 million cubic feet of natural gas per day and extract up to 40,000 barrels per day (BPD) of natural gas liquids (NGLs) [1]. Athena is slated to begin operations in the fourth quarter of 2026.

Upon completion, the new processing plant will significantly enhance EPD's total processing capabilities in the Midland Basin. The company’s total processing capacity will surge to 2.2 billion cubic feet per day of natural gas and 310,000 BPD of NGLs, underscoring EPD's commitment to scaling its operations to meet market demand [1]. The financial commitments for these projects have been integrated into EPD's capital expenditure forecasts, with estimates ranging from $4.0 billion to $4.5 billion for 2025, and $2.2 billion to $2.5 billion for 2026 [1].

This acquisition aligns with EPD's core strategy of expanding its Midland Basin franchise through a combination of organic investments and targeted, synergistic acquisitions. According to A.J. Teague, co-chief executive officer of EPD's general partner, the company's continued investment in natural gas processing infrastructure supports its producer customers and brings additional volume into its integrated natural gas liquids value chain [1].

The acquisition is currently awaiting customary regulatory approvals and is projected to be finalized in the third quarter of 2025. This deal, along with the development of the Athena plant, positions EPD for continued growth and reinforces its critical role as a midstream provider in the dynamic Permian Basin [1].

References:
[1] https://www.chemanalyst.com/NewsAndDeals/NewsDetails/enterprise-products-partners-expands-midland-basin-footprint-with-occidental-asset-38441
[2] https://www.hellenicshippingnews.com/adnoc-gas-commissions-das-island-igde-2-project-looks-to-expand-capacity-2/
[3] https://www.ainvest.com/news/enterprise-products-partners-5-6b-project-backlog-boost-margins-2508/