Investment firm Sixth Street, through its funds, has agreed to acquire non-controlling interests in Permian and Eagle Ford midstream assets of BPX Energy, BP’s onshore oil and gas business in the United States. BPX will remain the operator of the assets.

The transaction is valued at US$1.5 billion and is structured in two phases. Around US$1 billion is being paid upon signing, with the balance expected by the end of the year, subject to regulatory approvals.

The BPX midstream assets encompass pipelines and facilities in the Eagle Ford and Permian basins, including four Permian central processing facilities – Grand Slam, Bingo, Checkmate, and Crossroads. These assets connect wells to third-party pipeline systems, transporting the oil and gas to customers. 

Following completion of both transactions, BPX’s interest in the Permian midstream assets will be reduced 51% from 100%, while its ownership of the Eagle Ford midstream assets will move to 25% from 75%. Sixth Street will hold the remaining, non-operating interests.

“We are pleased to welcome Sixth Street as a co-owner in our Permian and Eagle Ford midstream assets,“ says BPX chief executive officer Kyle Koontz. “We recognized early on that investing in midstream would be an important ingredient to our success in these basins in terms of driving value, flow assurance, and lowering emissions.”

San Francisco-headquartered Sixth Street has around US$75 billion of assets under management.