ONEOK is set to acquire Brazos Midstream's Permian Midland Basin natural gas gathering and processing assets for $4.43 billion, expanding its footprint in the prolific American oil hub. The energy midstream company said Sunday the deal is backed by a $9 billion nonvoting minority equity investment from funds and affiliates managed by Apollo Global Management. With the remaining funds, ONEOK plans to reduce its debts by $5 billion. The acquisition more than doubles ONEOK's Midland Basin processing capacity to about 2.3 billion cubic feet a day, including plants currently being built. The Brazos Midland platform includes 600,000 dedicated acres supported by long-term, fixed-fee contracts with an average remaining term of over 12 years. The site is actively being drilled by 14 drilling rigs from producers including Exxon Mobil, Diamondback Energy and Double Eagle.

"The acquisition expands our scale in the Permian Midland Basin, advances our integrated wellhead-to-water strategy and strengthens connectivity across our natural gas and NGL value chain," said Chief Executive Pierce Norton II.

ONEOK said Apollo's investment carries an internal rate of return capped at 7% for the first nine years, while distributions in excess of that rate will be used to lower the minority equity capital balance over time.