America's pipeline operators are on a buying spree. This week, Tulsa-based ONEOK bought West Texas's Brazos Midstream Permian Basin assets for $4.42 billion. That deal came shortly after Williams acquired Momentum Midstream's Texas and Louisiana gathering and processing facilities for $5.5 billion. In May, Western Midstream paid $1.6 billion for Brazos's Delaware Basin facilities in the western Permian. Combined, the three deals total roughly $11.5 billion spent in a matter of months.
The consolidation wave is a bet on demand. U.S. natural gas production has more than doubled over the 20 years since the shale boom began in 2006, following decades of flat output. The country now produces about a quarter of the world's natural gas, nearly double second-place Russia, and leads the world in liquefied natural gas exports, even though the U.S. only began shipping LNG a decade ago.
According to Department of Energy projections cited by Fortune, output could climb another 35% from current levels to 150 billion cubic feet per day by 2050, up from 50 Bcf/d two decades ago, driven by LNG export buildout and surging power demand from AI data centers.
'They're getting the gas to help feed that AI demand to profit along every step of the value chain,' said London Spivey, an energy analyst at East Daley Analytics, describing how ONEOK captures margin from wellhead to pipeline to end user. Spivey said the Brazos deal, which includes 700 miles of gathering lines and 1.2 Bcf/d of processing capacity, 'highlights the trend that we've been seeing across the entire industry of these big publics going in and buying out all these privates and consolidating.'
ONEOK CEO Pierce Norton told Fortune the company is positioning for rising gas supply. 'There will eventually have to be more drilling in the United States than what's going on right now, which will probably mean that price does creep up,' Norton said. 'The demand is going to be there, and it's going to be driven by LNG exports and the AI data centers.' Norton said data-center developers are increasingly focused on Texas.
Separate from the Brazos acquisition, ONEOK and partners are building the 450-mile Eiger Express Pipeline to move Permian gas to the Houston area, set to come online in 2028. Customer demand was strong enough that planned capacity was increased from 2.5 Bcf/d to more than 3.5 Bcf/d. Norton said a bottleneck of long-haul pipelines from West Texas to the Gulf Coast has at times pushed regional gas prices negative, forcing producers to pay to have excess gas removed — a problem he said new pipeline capacity will resolve.
ONEOK built its current scale through earlier purchases, including Magellan Midstream for $18.8 billion including debt in 2023, along with EnLink Midstream and Medallion Midstream.
The numbers come first: private capital, not federal mandate, is financing the infrastructure that will carry gas to data centers and export terminals along the Texas and Louisiana coast — states Norton and Spivey both describe as friendly to industry. That regulatory posture, more than any subsidy, is what these operators are betting on.
Capital rewards clear rules. As AI's power appetite grows and Washington's energy debates drift toward climate mandates, the market has already voted with $11.5 billion in transactions — a wager that molecules, pipelines and margins will outlast the policy noise.
