Hot on the heels of their Lotus Midstream acquisition, Energy Transfer (ET) and Crestwood Equity Partners (Crestwood) announced that the two have entered into a definitive, all-equity merger agreement valued at approximately $7.1 Billion.
The acquisition complements ET’s Permian assets, adding an additional 613 MMcf/d in processing capacity from Crestwood’s Orla Processing plant and Carlsbad trains in the Delaware Basin, which deliver their produced NGLs to ET’s Lone Star system. Not to mention the 1.1 Bcf/d in gathering capacity across the Willow Lake system in New Mexico, Nautilus system in Loving County, TX, and the Panther system in Winkler County, TX. Additionally, the acquisition provides ET entry into the Williston Basin, where Crestwood boasts 250 Mb/d in crude oil gathering capacity, the COLT rail hub (providing 160 Mb/d of loading capacity) and 1.2 MMbbl in crude storage. In the Powder River Basin, ET is jumping into the play with Crestwood’s established Jackalope Gas gathering system (398 MMcf/d gathering capacity) and the Bucking Horse plant, which can process 345 MMcf/d.
The deal will also augment ET’s NGL-related operations in the Marcellus/Utica, where the company owns the Mariner West ethane pipeline and the multi-product Mariner East pipeline system, which takes ethane, propane and butanes east to the Marcus Hook terminal near Philadelphia. Across their 13 LPG terminals, Crestwood has 10 MMbbls of storage capacity, as well as takeaway capacity to Mont Belvieu and through Enterprise’s TEPPCO & Dixie pipelines and a robust lineup of 500 NGL trucks and 1,100 NGL railcars.
The transaction still has to go through the SEC and other regulatory hoops, ET expects the deal to close by the end of this year. The acquisition broadens ET’s ‘wellhead to water’ business and nets them some skin in the game in the Williston and Powder River basin, where their only development is the Yellowstone refined products pipeline JV, operated by P66 of which ET owns 14%.
