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Oklahoma-based OneOK Partners agreed Monday to buy natural gas liquids pipelines and related assets from affiliates of Chevron for $800 million.

OneOK will acquire an 80 percent interest in the West Texas LPG Pipeline Limited Partnership and 100 percent interest in the Mesquite Pipeline.

The remaining 20 percent of West Texas LPG will still be owned by Texas-based Martin Midstream Partners.

The Mesquite Pipeline is made up of a combined 2,600 miles of NGL gathering pipelines that stretches from the Permian basin in southeast New Mexico to East Texas.

OneOK will operate both pipelines.

Once the deal closes, OneOK will operate both pipelines.

The company projects that the assets will generate around $40 million in annual adjusted EBITDA in 2014 with “significant growth potential.”

OneOk’s share in EBITDA from the assets is also expected to grow by more than double by 2017 through “capacity-expansion opportunities, capacity upgrades, bundled services and integration into the partnership’s existing systems.”

The deal is expected to close in the fourth quarter of 2014.

“Acquiring these natural gas liquids pipelines allows us to continue to serve producers in the Permian basin and other multiple high producing NGL-rich basins, including the Williston basin, the Powder River basin, and the Cana-Woodford and Scoop plays in Oklahoma,” OneOK CEO Terry Spencer said.


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