Houston’s Enterprise Products Partners LP has agreed to acquire Navitas Midstream Partners LLC for $3.25 billion, giving the giant partnership an entry point in the Permian Basin of West Texas and an additional 1 Bcf/d of natural gas processing capacity.

Navitas Assets

The agreement to acquire Navitas, headquartered north of Houston in The Woodlands, could be completed by the end of March, with an Enterprise affiliate planning to use cash-on-hand and existing credit for the deal..

Enterprise management lauded the move as giving the natural gas processing and natural gas liquids (NGL) business a strong opening in the Permian’s Midland sub-basin, which co-CEO Jim Teague called the “most attractive in the U.S.”

“We do not have a natural gas or NGL presence in the Midland Basin other than downstream pipelines,” Teague said. “This acquisition will give us an entry point into the basin.”

Navitas, backed by private equity firm Warburg Pincus LLC, has secured around 1,750 miles of gas gathering pipelines since it began development seven years ago. Its latest project, the Leiker Plant, is set to be completed before the end of the first quarter. With Leiker, Enterprise would have 1 Bcf/d-plus of cryogenic gas processing capacity in the Midland at its disposal.

The Leiker plant would mark the fifth facility created by Navitas as a part of its Midland Basin Processing Complex in West Texas near the county lines of Midland and Glasscock.

The complex has interconnects to seven pipelines, including the Enterprise North Texas Pipeline. It also has NGL interconnects to Chevron Phillips Chemicals Co.’s Chemical EZ Pipeline, the Sand Hills Pipeline, Oneok Hydrocarbon’s liquefied petroleum gas pipeline and the Shin Oak Pipeline.

Enterprise already has a bundle of assets in the Midland’s twin sub-basin, the Delaware, which stretches into New Mexico. Included in the portfolio are the 2.6 million bbl Midland Terminal in West Texas and stakes in the Midland-to-ECHO and Basin Pipeline systems that move crude oil to the Cushing Hub in Oklahoma and to the Texas coast near Houston.

Enterprise executives said the Midland offered one of the most lucrative opportunities as around 20% of the country’s onshore drilling activity is currently centered there.

“The system, including its large footprint of low pressure natural gas gathering, is an attractive processing franchise that provides value added services to producers,” said Enterprise general partner CFO Randy Fowler. 

The Midland generated 5.4 Bcf/d in 2020, producing about 6% of the total dry natural gas production in the United States, according to the Energy Information Administration.