ArcLight Capital Partners announced Wednesday it has acquired a 25% equity interest in the Gulf Coast Express Pipeline (GCX) from a Phillips 66 affiliate for $865 million. 

Following the acquisition, GCX will be jointly owned by subsidiaries of Kinder Morgan and ArcLight, with operations managed by a Kinder Morgan subsidiary. 

GCX is a 500-mile natural gas pipeline with a capacity of approximately 2 billion cubic feet per day. The pipeline transports natural gas from the Permian Basin to key U.S. Gulf Coast markets, including the growing liquefied natural gas (LNG) export market in South Texas. 

"As the U.S. seeks to meet the rapidly growing power demand needs associated with AI and data center infrastructure, we believe more natural gas-related infrastructure will be needed," ArcLight founder Dan Revers said in a release. 

"This acquisition builds on our history of investing in critical gas infrastructure and expands our strategic partnership with Kinder Morgan." 

ArcLight, a company that has been in the energy infrastructure business since 2001, has ownership, under its control, or operates in excess of 47,000 miles of electric and gas transmission infrastructure. 

"We believe GCX represents a critical-path, strategic natural gas infrastructure asset with opportunities for growth," said ArcLight partner Lucius Taylor.

"As one of the largest, lowest-cost transmission assets in the region, we believe GCX is well positioned to capitalize on the dual tailwinds of growing Permian production and long-term LNG, power, and industrial demand growth." 

It saw Barclays Capital acting as the deal's financial adviser and Latham & Watkins acted as legal advisor to ArcLight. In June 2024, an affiliate of ArcLight acquired a 16% interest in GCX from Kinetik for US$510 mln.