KKR’s fifth global infrastructure fund has taken a 50% stake in US water management platform Deep Blue Midland Basin as part of a joint buyout with Diamondback Energy.
KKR and US energy company Diamondback Energy will acquire the 70% interest held by Five Point Infrastructure, raising Diamondback’s existing 30% stake in the Permian Basin asset to 50%.
Financial details were undisclosed.
Diamondback Energy formed Deep Blue with Five Point in 2023, and operates an integrated water infrastructure network that provides services across the full water lifecycle, including sourcing, transportation, storage, recycling and disposal.
James Cunningham, partner at KKR, said: “Deep Blue plays an important role in supporting energy production in the Permian Basin, and we see a compelling opportunity to build on its strong foundation to meet the region’s growing water infrastructure needs.
“We are particularly excited to work with Diamondback, whose longstanding presence in the region make them an ideal strategic partner. We view this investment as an important first step in building a broader relationship and look forward to exploring additional opportunities to invest together in essential infrastructure.”
Kaes Van’t Hof, CEO of Diamondback, said, “Through our strategic partnership with Five Point, we are proud to have established and scaled a world-class water infrastructure platform in the Midland Basin. The Deep Blue system is critical for Diamondback’s core operations, which require reliable transportation of nearly 2m barrels of water per day.
“Acquiring Five Point’s 70% interest alongside KKR secures this capability for the long term and establishes a strategic partnership that is well positioned for traditional growth with additional opportunities to expand outside of oil and gas through advancements in new technology and potential industrial use cases in the Permian Basin.”
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