Natural gas pipeline operator ONEOK will expand into oil and refined products transportation with the purchase of Magellan Midstream Partners, L.P. for $18.8 billion in cash and equity, creating the second-largest US midstream company with an enterprise value of $60 billion.

The deal gives Magellan investors $25 and 0.667 shares of ONEOK for every Magellan share owned, which works out to be $67.50 each, 21.8% above Magellan’s closing price last Friday. The transaction includes $8.8 billion in new equity and the assumption of $5 billion of existing debt.

The merger will create a single operator across more than 25,000 miles of “liquids-oriented” pipelines and assets across the US Midcontinent and Texas Gulf Coast.

“Our expanded products platform will present further opportunities in our core businesses as well as enhance our ability to participate in the ongoing energy transformation with an increased presence in sustainable fuel and hydrogen corridors,” said Pierce H. Norton II, ONEOK president and CEO.

But the more striking dollar figures behind the deal lie in the tax ledger.

OneOK says it will have the ability to deduct roughly $15 billion of Magellan’s enterprise value from its tax bill and use the “step up” in Magellan’s tax basis to defer the new 15% corporate alternative minimum tax from 2024-27. The latter should translate into roughly $3 billion of deferred cash taxes.