ArcLight Acquires Stake in 500-Mile Gulf Coast Express Pipeline from Phillips 66 for $865 Million
(P&GJ) — ArcLight Capital Partners has acquired a 25% equity stake in Gulf Coast Express Pipeline LLC (GCX) from Phillips 66 for $865 million. Following the deal, GCX will be jointly owned by subsidiaries of Kinder Morgan and ArcLight, with Kinder Morgan continuing to operate the pipeline.
The 500-mile natural gas pipeline has a capacity of about 2 Bcf/d and serves as a key outlet for Permian Basin gas, supplying the U.S. Gulf Coast, including the growing LNG export market in South Texas.
"As the U.S. seeks to meet the rapidly growing power demand needs associated with AI and data center infrastructure, we believe more natural gas-related infrastructure, both power and midstream assets, will be needed," said Dan Revers, founder of ArcLight. "This acquisition builds on our history of investing in critical gas infrastructure and expands our strategic partnership with Kinder Morgan."
Lucius Taylor, a partner at ArcLight, called GCX a "critical-path, strategic natural gas infrastructure asset" with growth potential, citing its low-cost transmission capacity and exposure to increasing Permian production and long-term LNG and industrial demand.
ArcLight has invested in over 47,000 miles of electric and gas transmission since 2001, making it one of the largest private owners of natural gas-related infrastructure.
Barclays Capital advised ArcLight on the transaction, and Latham & Watkins served as legal counsel.
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