Energy Transfer is expanding its natural-gas pipeline and processing network in the US Permian Basin through the acquisition of WTG Midstream Holdings for $3.25bn (€3bn) from affiliates of Stonepeak, the Davis Estate and Diamondback Energy.
The acquisition also includes a 20% interest in BANGL Pipeline, a 425-mile natural-gas liquids pipeline connecting the Permian Basin to markets on the Texas Gulf Coast.
WTG, which has a 6,000-mile pipeline network, provides midstream services including wellhead gathering, intra-basin transportation and processing services. The company serves 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 and is constructing two new plants.
The acquisition price comprises $2.45bn in cash and around 50.8m newly issued Energy Transfer common units.
Diamondback Energy, which has owned a 25% stake in WTG since October 2021, will receive a total pre-tax consideration of around $375m following the deal’s closing in the third quarter of the year.
Travis Stice, chairman and CEO Diamondback Energy, said: “We would like to congratulate Stonepeak and the WTG team on this fantastic outcome. Not only has our partnership generated an outsized economic return, but WTG’s gas gathering and processing system continues to support Diamondback’s substantial activity on our dedicated acreage.
“We are excited to further expand our relationship with Energy Transfer and expect a smooth operational transition.”
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