Kinetik will use the funds for general purposes, including part of the aggregate $765 million purchase price for Durango. (Source: Shutterstock/Kinetik Holdings/ ArcLight Capital Partners)
Kinetik Holdings completed a $540 million sale of its interest in the Gulf Coast Express (GCX) pipeline on June 4 to ArcLight Capital Partners, less than a month after it announced the deal as a funding mechanism for its acquisition of Durango Permian Infrastructure.
Kinetik sold its 16% equity interest to ArcLight for $510 million in upfront cash and $30 million in deferred cash due after the final investment decision on a capacity expansion project. The release did not specify the project.
Kinetik will use the funds for general purposes, including part of the aggregate $765 million purchase price for Durango.
Proceeds will also be used for capital investment to support Kinetik’s new 15-year low-pressure and high-pressure gas gathering and processing agreement in Eddy County, New Mexico.
The company is building a 200 MMcf/d greenfield natural gas processing facility in Eddy County, which the company expects to complete by April 2025. When finished, Kinetik’s processing capacity will almost double to 420 MMcf/d.
With the sale of its interest in GCX, Kinetik is now a purely Delaware Basin midstream provider.
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