Energy Transfer’s plan to buy WTG Midstream, a West Texas-based and private equity-backed natural gas gatherer and processor, just got a bit less expensive — and not quite so comprehensive. Energy Transfer will still acquire WTG’s network of more than 6,000 miles of gas pipelines, eight processing plants and more, but WTG’s 20% stake in the joint-venture (JV) BANGL pipeline system is no longer part of the deal. In today’s RBN blog, we’ll take a look at the detour from the original transaction.
Dallas-based Energy Transfer (ET) has been among the most active buyers in what has been a vigorous midstream M&A cycle in recent years, as noted in our recent Drill Down Report, Let’s Work Together. We examined ET’s late-May announcement that it would buy WTG in a $3.25 billion cash-and-stock deal in You Ain’t Seen Nothin’ Yet, the latest in a series of acquisitions that bulked up ET’s oil, gas and NGL gathering, storage and long-haul pipeline holdings across multiple plays, from the mighty Permian Basin in West Texas and southeastern New Mexico to the Denver-Julesburg (DJ) Basin in Colorado and the Anadarko Basin in Oklahoma and Kansas.
The deal still includes WTG’s more than 6,000 miles of gas gathering pipelines that serve operators in the Permian’s Midland Basin, more specifically in West Texas’s Martin, Howard, Upton, Reagan and Irion counties (light-orange lines in Figure 1 below). WTG also has eight gas processing plants with a combined ~1.3 Bcf/d of capacity and two more under construction with about another 0.4 Bcf/d of capacity (red plant icons). The first of those new plants is slated to come online in Q3 2024, followed by the second in Q3 2025. The assets complement ET’s existing gas gathering lines (light-blue lines) and processing plants (blue plant icons) in the Permian.
Figure 1. Energy Transfer and WTG Midstream’s Permian Basin Assets. Source: Energy Transfer
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