Over the past quarter-century, through a combination of greenfield development and acquisitions, Energy Transfer (ET) has built out integrated networks of midstream assets that add value — and generate profits — as they move crude oil, natural gas, and NGLs from the wellhead to end-users. A couple of weeks ago, ET took another big step in its expansion strategy, announcing its plan to buy Enable Midstream in a $7.2 billion, all-equity deal expected to close in mid-2021. The assets to be acquired will augment the synergies ET has already achieved, particularly regarding NGL flows into its Mont Belvieu fractionation and export facilities as well as flows of natural gas through Louisiana’s central gas corridor to LNG and industrial demand on the Gulf Coast. Today, we examine how the Enable Midstream acquisition may help propel ET forward.
Today’s blog was written in partnership with East Daley Capital, which published its analysis of the deal within hours of its announcement. For more of East Daley’s insights into the inner workings of the ET/Enable deal, click here.
We’ve discussed various assets of ET over the past year, including, most recently, an update to the Dakota Access Pipeline saga, the recent expansion of the company’s Nederland export terminal, and the latest from its Mariner East and Marcus Hook assets. Even before ET announced its planned acquisition of Enable Midstream last month and closed on the purchase of SemGroup in December 2019, we had to break up our deep-dive Spotlight Report on the company into two parts — there was simply too much to write about.
Likewise, because ET’s assets stretch from border to border, we’ll focus this blog on three regions where the overlap of Enable’s infrastructure appears to provide the most opportunity: Louisiana and Gulf Coast gas; NGLs moving from the Anadarko Basin to Mont Belvieu; and Midcontinent gathering and processing (G&P) systems.
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