ArcLight Capital Partners, LLC and its affiliates announced that they have successfully acquired a 25% stake in Gulf Coast Express Pipeline LLC (GCX) for $865 million from Phillips 66. From now on, GCX will be co-owned by subsidiaries of Kinder Morgan, Inc. (KMI) and ArcLight affiliates. However, GCX will still be operated by a KMI subsidiary. GCX is a major 500-mile natural gas pipeline with a capacity of 2 billion cubic feet per day (Bcf/d).
It serves as a vital connection for transporting natural gas from the Permian Basin to the U.S. Gulf Coast markets, including regions with growing demand like the LNG export market in South Texas. The pipeline is supported by long-term contracts with high-quality shippers. Since 2001, ArcLight has been involved in owning, controlling, or operating over 47,000 miles of electric and gas transmission lines, making it one of the largest private owners of natural gas transmission infrastructure.
“As the U.S. seeks to meet the rapidly growing power demand needs associated with AI and data center infrastructure, we believe more natural gas related infrastructure, both power and midstream assets, will be needed to meet this objective. This acquisition builds on our history dating back to 2001 of investing in critical gas infrastructure, ability to be a value-added partner, and expands our strategic partnership with Kinder Morgan,” commented Dan Revers, Founder of ArcLight.
Lucius Taylor, Partner at ArcLight, “We believe GCX represents a critical-path, strategic natural gas infrastructure asset with opportunities for growth. As one of the largest, lowest cost transmission assets in the region, we believe GCX is well positioned to capitalize on the dual tailwinds of growing Permian production and long-term LNG, power, and industrial demand growth.”
Barclays Capital Inc. served as the financial advisor, and Latham & Watkins LLP provided legal counsel to ArcLight during the transaction.
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