Energy Transfer to Acquire WTG Midstream in $3.25 Billion Transaction

Energy Transfer LP and WTG Midstream, LLC (“WTG”) announced on May 28 that the parties have entered into a definitive agreement for Energy Transfer to acquire WTG Midstream Holdings LLC in a transaction valued at approximately $3.25 billion from affiliates of Stonepeak, the Davis Estate and Diamondback Energy, Inc. Consideration for the transaction will be comprised of $2.45 billion in cash and approximately 50.8 million newly issued Energy Transfer common units. The transaction is expected to close in the third quarter of 2024, subject to regulatory approval and customary closing conditions.

WTG provides comprehensive midstream services including wellhead gathering, intra-basin transportation and processing services. The company’s 6,000-mile pipeline network serves significant operators in some of the most active areas of the Midland Basin including Martin, Howard, Upton, Reagan and Irion counties. WTG also operates eight processing plants with a total capacity of approximately 1.3 Bcf/d and is constructing two new plants with an additional capacity of approximately 0.4 Bcf/d. The first new plant is expected to be in service in the third quarter of 2024 and the second plant the third quarter of 2025.

WTG’s extensive system processes significant volumes from large cap investment grade producers with firm, long-term contracts and acreage dedications. The addition of WTG assets is expected to provide Energy Transfer with increased access to growing supplies of natural gas and NGL volumes enhancing the partnership’s Permian operations and downstream businesses.

The acquisition also includes a 20% interest in BANGL Pipeline, an approximately 425-mile NGL pipeline with an initial capacity of 125,000 Bbls/d (expandable up over 300,000 Bbls/d) connecting the Permian Basin to markets on the Texas Gulf Coast. Energy Transfer benefits from well positioned assets in the Permian which is the most active region in the U.S. and this acquisition is expected to provide future upside as the basin continues to develop on and around Energy Transfer’s infrastructure.

Note: Image courtesy of Energy Transfer