By OGJ editors
HOUSTON, Oct. 18 -- Oneok Inc. has signed a definitive agreement to buy the Texas division and related assets of Austin-based Southern Union Gas Co. for $420 million. Southern Union Gas is a unit of Southern Union Co. of Wilkes-Barre, Pa. This most recent acquisition follows the Tulsa-based energy firm's divestiture last week of its north central midstream gas assets in Oklahoma to a unit of privately held independent oil and natural gas company Mustang Fuel Corp., Oklahoma City, for $92 million.
The related assets being acquired by Oneok include SUPro Energy Co., Southern Transmission Co., Mercado Gas Services Inc., and Southern Union Gas's natural gas distribution investments in Mexico. The acquisition also includes a 125 mile natural gas transmission system, which is regulated by the Texas Railroad Commission.
The acquisition, according to David Kyle, Oneok chairman, president, and CEO, will make the company the fourth largest gas distributor in the US with nearly 2 million customers in Oklahoma, Kansas, and Texas. Oneok also will become the third largest gas distributor in Texas, the company said.
The Texas properties' operating income for the 12 months ending June 30 was $41.2 million, of which approximately 95% was related to the Texas distribution operations, Oneok said.
The company expects the deal to close by yearend.
Separately, Oneok's divestiture of its Oklahoma assets included three processing plants and related gathering systems and an interest in a fourth processing plant. The properties were no longer considered by the company to be core, Kyle said.
Closing on that deal is expected on or before Nov. 15, Oneok said.
