Enterprise Expands Midland Basin Operations with Acquisition of Occidental’s Gas Gathering Assets, Long-Term Processing Agreement, and New Athena Plant
Enterprise Products Partners L.P. (NYSE: EPD), a leading North American midstream energy services provider, has announced a significant strategic expansion in the Midland Basin. Through a series of agreements with Occidental, Enterprise will acquire a natural gas gathering affiliate and initiate a long-term natural gas gathering and processing arrangement. These efforts are aimed at supporting continued growth in one of the most prolific oil and gas producing regions in the United States and reinforcing Enterprise’s long-term position in the Permian Basin’s midstream sector.
Acquisition of Occidental’s Gathering Affiliate
Under the terms of the agreement, affiliates of Enterprise will acquire Occidental’s natural gas gathering affiliate in a debt-free transaction valued at $580 million in cash consideration. The affiliate owns and operates approximately 200 miles of natural gas gathering pipelines strategically located in the Midland Basin, which directly support Occidental’s production activities across four key counties in the region.
The transaction includes a long-term dedication of roughly 73,000 acres, encompassing some of Occidental’s most productive acreage in the basin. This dedication ensures that Enterprise will manage the collection and initial transportation of natural gas from these locations, significantly increasing throughput and utilization of its growing infrastructure in the area.
With this acquisition, Enterprise gains access to more than 1,000 drillable locations within Occidental’s acreage. This not only expands Enterprise’s current natural gas gathering footprint but also provides long-term development visibility, positioning the company to benefit from the continued drilling and production growth forecasted in the basin.
According to Enterprise, the acquired systems and acreage align directly with its strategic objective of reinforcing its Midland Basin presence through bolt-on acquisitions that complement its existing infrastructure.
Construction of the New Athena Processing Plant
To support the expected increase in natural gas volumes and optimize the value chain for its producer customers, Enterprise also announced the construction of a new state-of-the-art gas processing facility: the Athena natural gas processing plant.
Located in the Midland Basin, Athena will be Enterprise’s ninth natural gas processing plant in the region and will feature a capacity to process 300 million cubic feet per day (MMcf/d) of natural gas. Additionally, the facility will be capable of extracting up to 40,000 barrels per day (BPD) of natural gas liquids (NGLs).
Once Athena is operational, projected for the fourth quarter of 2026, Enterprise will possess the capability to process a total of 2.2 billion cubic feet per day (Bcf/d) of natural gas and recover 310,000 BPD of NGLs from its Midland Basin operations alone.
The construction of the Athena plant, along with the expansion of Enterprise’s natural gas gathering system, forms a significant portion of the company’s anticipated growth capital expenditures. Enterprise estimates capital outlays between $4.0 billion and $4.5 billion for 2025, and an additional $2.2 billion to $2.5 billion for 2026, with Athena representing a core investment during that period.
Strategic Alignment with Long-Term Growth
This latest development demonstrates Enterprise’s continued focus on strategically expanding its presence in the Midland Basin, an area that remains a centerpiece of U.S. oil and gas production. The Permian Basin overall is responsible for roughly 90 percent of the growth in domestic liquid hydrocarbons, making it a critical asset for midstream operators with integrated services across the energy value chain.
In a statement regarding the transaction, A.J. “Jim” Teague, co-chief executive officer of Enterprise’s general partner, emphasized the importance of these agreements in strengthening Enterprise’s position in the region:
“These agreements with Occidental are consistent with Enterprise’s focus on expanding our Midland Basin franchise through organic investments in our midstream network and through targeted acquisitions that bolt-on to our existing infrastructure. To accommodate production growth in this area of the basin, Enterprise will build its ninth Midland Basin natural gas processing plant and expand its natural gas gathering system.”
Teague also noted that the move aligns with the broader strategy of integrating new volumes of gas and NGLs into Enterprise’s vertically integrated midstream value chain, thereby maximizing efficiency and returns for both Enterprise and its producer partners.
By investing in both infrastructure acquisition and new-build projects, Enterprise aims to solidify its ability to serve growing producer needs and ensure that the company remains the preferred midstream partner in the Permian Basin and beyond.
Long-Term Dedication Benefits
The 73,000-acre dedication that accompanies the acquisition is particularly notable. Long-term acreage dedications provide Enterprise with a stable, recurring stream of natural gas volumes for transportation and processing. They are a key part of the midstream business model, ensuring that significant capital investments, such as the Athena plant, are backed by predictable volume commitments.
In this case, the dedicated acreage represents a substantial portion of Occidental’s Midland Basin operations, providing Enterprise with a reliable foundation for capacity planning and asset utilization. This strategic dedication further underscores Occidental’s commitment to the partnership and belief in Enterprise’s ability to manage and enhance the value of its upstream production.
Regulatory Approvals and Closing Timeline
The transaction, while already agreed upon by both parties, is subject to customary regulatory approvals. These typically include antitrust clearance and various federal, state, and local filings. Assuming timely regulatory review, the transaction is expected to close in the third quarter of 2025.
Upon closing, Enterprise will assume full operational control of the acquired assets and begin integrating them into its broader Midland Basin infrastructure portfolio. The development of the Athena plant, though already announced, will continue on its current timeline, with construction activities ramping up throughout 2025 and 2026.
Enhancing Enterprise’s Competitive Position
This acquisition and concurrent infrastructure investment are poised to enhance Enterprise’s long-term competitive advantage in the Permian Basin. The Midland Basin, in particular, continues to be a center of capital deployment, technological advancement, and production growth, and midstream companies with scalable and integrated capabilities are best positioned to capture value.
For Enterprise, the benefits are multifold:
- Increased footprint: Over 200 miles of new gathering infrastructure will extend the reach and capacity of Enterprise’s Midland Basin gathering network.
- Volume growth visibility: Access to more than 1,000 drillable locations ensures predictable long-term volume increases.
- Enhanced processing capabilities: Athena will significantly increase Enterprise’s ability to process gas and recover NGLs, feeding into its broader distribution network.
- Vertical integration: More upstream gas flowing into Enterprise’s systems means higher utilization of pipelines, fractionators, storage, and export terminals.
Moreover, this expansion positions Enterprise to better serve not just Occidental, but also other producers operating in the same core region of the basin, leveraging its growing infrastructure footprint for third-party opportunities.
