Energy Transfer Completes WTG Midstream Acquisition, Expanding Pipeline Network by 6,000 Miles
(P&GJ) — Energy Transfer LP has finalized its acquisition of WTG Midstream Holdings LLC (WTG) for $2.275 billion in cash and approximately 50.8 million newly issued ET common units.
This acquisition bolsters Energy Transfer’s Permian Basin operations with an additional 6,000 miles of gas gathering pipelines, primarily in the Midland Basin. Included in the transaction are eight gas processing plants with a combined capacity of approximately 1.3 Bcf/d, plus two plants currently under construction.
The move is expected to significantly enhance Energy Transfer’s ability to handle growing volumes of natural gas liquids (NGLs) and natural gas, thereby increasing revenue from gathering, processing, and downstream transportation and fractionation activities.
"As Permian (natural gas liquids) production continues to surprise to the upside, we would expect significant commercial synergies in time," Raymond James analysts said in May when the deal was announced.
"We see the Delaware (basin) as a bit more fragmented than the Midland, though a deal of WTG's scale shows that the Midland could still see transactions at the corporate scale."
The acquisition also includes a 20% interest in the BANGL Pipeline, a roughly 425-mile natural gas pipeline connecting the Permian Basin to markets on the Texas Gulf Coast.
Energy Transfer is looking to build a deepwater port along the Texas coast and expects to receive a draft environmental impact statement for its offshore terminal this quarter.
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