There’s a pipeline of deals—for pipelines—that will help power the AI boom

The energy deal market has been hesitant while the Middle East stays chaotic and fuel prices remain high. Sellers want to price in the pain. Buyers are looking at the longer term. That gap has slowed a lot of transactions, but not the pipeline business.

Midstream — the pipes, gathering systems, and processing plants that move oil and gas from wellheads to refineries, power plants, and LNG export hubs — has been busy. Andrew Dittmar of Enverus Intelligence Research says demand for infrastructure is strong, especially on the natural gas side, as LNG demand grows on the Gulf Coast and data center demand rises too.

The sector may get another lift from Washington. A bipartisan Senate bill aimed at infrastructure permitting reform was introduced Wednesday, and if it advances, it could speed oil and gas pipelines, along with wind, solar, and electric transmission projects. In other words, the AI buildout is starting to pull on the same wires and pipes that the broader energy system depends on.

The deal flow backs that up. ONEOK bought Brazos Midstream’s Permian Basin assets for $4.42 billion. Williams paid $5.5 billion for Momentum Midstream and its Texas and Louisiana pipeline gathering and processing facilities. Western Midstream spent $1.6 billion for Brazos’s Delaware Basin facilities. On the oil side, Enbridge bought Tallgrass Energy’s crude assets for $2.55 billion, and Plains All American Pipeline paid $585 million for Silver Creek Midstream in Wyoming.

The pattern is hard to miss: private equity sellers, public company buyers, and a clear appetite for bigger integrated systems. Dittmar expects the smaller players to keep getting rolled up. Upstream has been quieter, with the biggest recent namesake deal being Devon Energy’s $26.5 billion purchase of Coterra Energy earlier this year, before the Iran war began. Since then, Magnolia Oil & Gas bought WildFire Energy for $4 billion, and Devon is now trying to sell some Eagle Ford assets to reduce debt. BP reportedly looked at those assets and stepped away, which is telling in its own way: U.S. shale may be maturing, but it is still good enough to pull in global money.