Energy Transfer Adds 6,000 Miles of Pipeline with $3.25 Billion WTG Midstream Acquisition
(Reuters) — Energy Transfer said on Tuesday it would buy WTG Midstream Holdings in a deal valued at about $3.25 billion, the latest acquisition in the midstream sector aimed at expanding transportation and processing network in the Permian basin.
Dealmaking in the pipeline sector has been picking up lately as some companies look to cut costs, while others seek to scale and gain access to attractive oil and gas producing regions such as the Permian basin and export facilities on the U.S. Gulf Coast.
RELATED: Energy Transfer Subsidiary Sunoco and NuStar Energy Merger Receives Green Light from Unitholders
The WTG deal, expected to close in the third quarter of 2024, will comprise $2.45 billion in cash and about 50.8 million newly issued Energy Transfer shares.
Energy Transfer will acquire WTG from affiliates of Stonepeak, the Davis Estate, and Diamondback Energy. Upon closing, Diamondback, which holds a 25% stake in WTG, stands to get about $375 million.
WTG's assets include a 6,000-mile pipeline network that serves the Midland Basin, eight processing plants with a total capacity of 1.3 billion cubic feet per day, and two new plants that are under construction.
"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 a note.
"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.
Last year, the company also bought Crestwood Equity Partners for $7.1 billion, Lotus Midstream for $1.45 billion, while its affiliate, Dallas-based Sunoco, acquired NuStar Energy in a $7.3 billion deal.
Related News
Related News
- Phillips 66 to Shut LA Oil Refinery, Ending Major Gasoline Output Amid Supply Concerns
- FERC Sides with Williams in Texas-Louisiana Pipeline Dispute with Energy Transfer
- U.S. Appeals Court Blocks Kinder Morgan’s Tennessee Pipeline Permits
- ConocoPhillips Eyes Sale of $1 Billion Permian Assets Amid Marathon Acquisition
- Valero Considers All Options, Including Sale, for California Refineries Amid Regulatory Pressure
- U.S. Appeals Court Blocks Kinder Morgan’s Tennessee Pipeline Permits
- Malaysia’s Oil Exports to China Surge Amid Broader Import Decline
- U.S. LNG Export Growth Faces Uncertainty as Trump’s Tariff Proposal Looms, Analysts Say
- Marathon Oil to Lay Off Over 500 Texas Workers Ahead of ConocoPhillips Merger
- Valero Considers All Options, Including Sale, for California Refineries Amid Regulatory Pressure
Comments