Energy Transfer Grows Shale Footprint With $7.1-Billion Pipeline Deal

The acquisition of Crestwood Equity Partners extends Energy Transfer’s position deeper into the Williston and Permian basins and provides entry into the Powder River Basin.

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Dallas-based Energy Transfer is growing its pipeline network by acquiring rival Crestwood Equity Partners in a deal valued at about $7.1 billion.

The deal, announced on 16 August, will expand Energy Transfer’s footprint deeper into the Williston Basin and the Permian’s Delaware Basin while providing entry into the Powder River Basin, with about 1.2 million dedicated acres across all basins.

It continues an acquisition push by Energy Transfer, who bought rival Lotus Midstream for $1.45 billion earlier this year.

Crestwood’s system includes gathering and processing assets located in the three basins and includes about 2.0 Bcf/D of gas gathering capacity and 1.4 Bcf/D of gas processing capacity. Additionally, the system has a crude oil gathering capacity of 340,000 B/D, Energy Transfer said in a statement.

The company added that the assets are expected to complement its downstream fractionation capacity at Mont Belvieu, Texas, and its hydrocarbon export capabilities from its Nederland Terminal in Texas and the Marcus Hook Terminal in Philadelphia, Pennsylvania. The transaction adds about 10 million bbl of storage capacity and trucking and rail terminals.

Ryan Hill, vice president at Enverus Intelligence Research, noted that Crestwood's basinwide gas and water infrastructure in the Bakken is aligned with public pure-play companies Chord Energy and Enerplus.

“We expect water volumes will continue to increase as activity shifts away from the core of the Bakken, driven primarily by Chord and Grayson Mill,” he said. “Energy Transfer will also benefit from adding exposure to the best economics and US oil growth engine—the Permian Basin.”

The transaction is expected to close in the fourth quarter of 2023, subject to the approval of Crestwood’s unitholders, regulatory approvals, and other customary closing conditions.