MPLX LP has finalized its $2.375 billion acquisition of Northwind Delaware Holdings LLC, more commonly known as Northwind Midstream. This company plays a crucial role in the energy sector by providing sour gas gathering, treatment, and processing services in the Lea County region of New Mexico.
The completion of this acquisition marks a significant milestone for MPLX, as it strengthens and enhances its natural gas and natural gas liquids (NGL) value chains in the rapidly developing Permian Basin.
One of the most promising aspects of this acquisition is its anticipated immediate impact on distributable cash flow. Analysts predict that, aside from the standard operational benefits, the investment includes an estimated additional capital expenditure of $500 million.
This positions the acquisition at a 7x multiple on the forecasted EBITDA for 2027, along with an anticipated mid-teen unlevered return. MPLX is making a strategic move that is designed to yield strong financial returns in the near future.
To finance the acquisition, MPLX will utilize the net proceeds from its $4.5 billion senior notes that were issued in August 2025. This decision reflects a well-considered strategy to ensure that the company has the necessary funds not only for the acquisition itself but also for the capital expenditures needed for ongoing expansion projects associated with this new venture.
The Northwind Midstream operation is a natural fit for MPLX, as it complements its existing natural gas system in the Delaware Basin. The acquisition encompasses over 200,000 dedicated acres and more than 200 miles of gathering pipelines. It also includes two operational acid gas injection wells, each with the capacity to process 20 million cubic feet per day (MMcf/d). Additionally, a third well has been permitted, which will increase the total processing capacity to 37 MMcf/d.
Currently, the system boasts a sour gas treating capacity of 150 MMcf/d. However, with the various expansion projects already in motion, it is expected that this capacity will be significantly increased to a remarkable 440 MMcf/d by the second half of 2026. Importantly, this system is supported by robust commitments from leading regional producers, ensuring a stable and reliable operational foundation.
Overall, this acquisition represents a pivotal step forward for MPLX, marking not just a financial investment but also a strategic enhancement of its capabilities in a key energy-producing region.
