Energy Transfer LP has agreed to acquire Crestwood Equity Partners LP in an all-equity transaction valued at about $7.1 billion. If completed, the deal would extend Energy Transfer’s position in the Williston and Delaware basins, while also providing entry into the Powder River basin.
In addition, the deal, which includes the assumption of $3.3 billion of debt, is expected to complement Energy Transfer’s downstream fractionation capacity at Mont Belvieu, as well as its hydrocarbon export capabilities from both its Nederland Terminal in Texas and the Marcus Hook Terminal in Philadelphia, Pa., the companies said in a joint statement Aug. 16.
Crestwood’s system includes gathering and processing assets in the Williston, Delaware, and Powder River basins, including 1,270,000 dedicated acres across all basins, about 2 bcfd of gas gathering capacity, 1.4 bcfd of gas processing capacity, and 340,000 b/d of crude gathering capacity.
The deal is also expected to provide benefits to Energy Transfer’s NGL & Refined Products and Crude Oil businesses with the addition of storage and terminal assets, including about 10 million bbl of storage capacity, as well as 13 trucking and rail terminals. These systems are anchored by predominantly investment-grade producer customers with firm, long-term contracts, and significant acreage dedications, the companies said.
Energy Transfer said it expects to achieve at least $40 million of annual run-rate cost synergies before additional benefits of financial and commercial opportunities.
Under the terms of the agreement, Crestwood common unitholders will receive 2.07 Energy Transfer common units for each Crestwood common unit. The transaction is expected to close in fourth-quarter 2023, subject to the approval of Crestwood’s unitholders, regulatory approvals, and other customary closing conditions.
Upon closing, Crestwood common unitholders are expected to own about 6.5% of Energy Transfer’s outstanding common units.