Sunday, 28 November 2021 03:25 GMT

Marathon Petroleum unit buys gas processor MarkWest

(MENAFN- AFP) MPLX LP, the pipeline unit of Marathon Petroleum, said Monday it was buying natural gas processor MarkWest Energy Partners for $15.8 billion in cash and shares.

MPLX, a partnership which operates about 2,900 miles (4,670 km) of pipeline across the US Midwest, said the deal would give it control of the country's second-largest natural gas processor with a key position in major shale fracking areas, including the Marcellus and Utica plays.

MPLX chairman and chief executive Gary Heminger said the combined company would be able to increase oil and gas distribution by 25 percent a year compounded through 2017, and to pursue value-adding projects at the midstream of the hydrocarbon production chain.

Marathon's strong balance sheet "will enable MarkWest to accelerate organic growth in some of the nation's most economic and prolific natural gas resource plays that it may have been limited in pursuing otherwise," Heminger said in a statement.

The deal would be mainly in stocks, a "unit for unit" transaction that aims to be tax-free and leave MarkWest as a fully owned subsidiary of MPLX. With MarkWest debt added, the total value is $20 billion.

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