Energy Transfer has wrapped up the previously announced $7.1bn acquisition of rival American midstream operator Crestwood Equity Partners in a move to further expand its position in the Delaware and Williston basins.
The New York Stock Exchange (NYSE) listed Energy Transfer has also made its entry into the Powder River basin through the deal.
Based on the closing price of Crestwood Equity Partners on 15 August 2023, the consideration includes the assumption of $3.3bn of debt.
The deal was approved by the master limited partnership’s unitholders during a meeting held in late October 2023.
Subsequent to the deal’s closure, the common units and preferred units of Crestwood Equity Partners ceased trading on the NYSE.
The all-stock deal was announced in August 2023. As per its terms, Crestwood Equity Partners’ unitholders exchanged each of their shares in the company for 2.07 of Energy Transfer’s common units.
Crestwood Equity Partners’ common unitholders are expected to own around 6.5% of the enlarged Energy Transfer’s outstanding common units.
Following the closing of the acquisition, Energy Transfer now owns and operates around 201,168km of pipelines and associated assets. These are located in all the key producing areas and markets across 41 states in the US.
Crestwood Equity Partners has a gas gathering capacity of nearly two billion cubic feet per day (bcf/day), a gas processing capacity of 1.4bcf/day, and a crude gathering capacity of 340,000 barrels per day (bpd).
Besides, the added assets will complement Energy Transfer’s current downstream fractionation capacity in Mont Belvieu. They will also improve the company’s ability to export hydrocarbons from the Nederland Terminal in Texas and Marcus Hook Terminal in Pennsylvania.
Furthermore, the acquisition of Crestwood Equity Partners is expected to benefit Energy Transfer’s natural gas liquid (NGL) and refined products and crude oil operations by incorporating strategically situated storage and terminal assets. These assets encompass nearly 10 million barrels of storage capacity, alongside trucking and rail terminals.
Energy Transfer stated: “The transaction is immediately accretive to distributable cash flow per unit for Energy Transfer, and adds significant cash flows from firm, long-term contracts and significant acreage dedications.
“Additionally, the combined operations of the two companies are expected to generate initial annual run-rate cost and efficiency synergies of at least $40m before additional anticipated benefits of financial and commercial synergies.”
