ONEOK Inc. (OKE) has announced an agreement to divest its three wholly-owned interstate natural gas pipeline systems to DT Midstream Inc. (DTM) for a total cash transaction valued at $1.2 billion, pending customary adjustments. The completion of this transaction is anticipated in the fourth quarter of 2024.
The sale includes three primary pipeline systems: Guardian Pipeline, L.L.C., which connects to multiple pipelines at the Chicago Hub near Joliet, Illinois, and serves local natural gas distribution and electric generation companies in Wisconsin; Midwestern Gas Transmission, a bidirectional system linking a major pipeline near Portland, Tennessee, with several interstate pipelines accessing the Utica and Marcellus Shales, alongside additional connections at the Chicago Hub; and Viking Gas Transmission, another bidirectional system that interfaces with a leading pipeline at the U.S. border near Emerson, Canada, and in Marshfield, Wisconsin.
ONEOK intends to utilize the net proceeds from this sale to bolster its financial flexibility and further its deleveraging efforts, aiming to achieve a leverage ratio of 3.5 times by 2026.