US-based Energy Transfer has completed the acquisition of WTG Midstream, a move set to enhance its Permian Basin operations.  

The transaction, first announced in May 2024 and valued at approximately $3.25bn, was completed through a combination of cash and stock. 

The cash component was around $2.27bn and approximately 50.8 million new common units were issued to the sellers, affiliates of Stonepeak, the Davis Estate and Diamondback Energy.  

WTG Midstream offers a suite of midstream services including wellhead gathering, intra-basin transportation and processing. 

The addition of WTG’s pipeline network, which spans around 9656.06km, will bolster Energy Transfer’s existing infrastructure in the Midland Basin. 

Furthermore, the deal brings eight gas processing plants with a total capacity of nearly 1.3 billion cubic feet per day into Energy Transfer’s portfolio, along with two more plants currently under construction.  

The first of these new plants is due to commence operations in the third quarter (Q3) of 2024, with the second following in Q3 2025. 

The integration of WTG’s assets is expected to generate additional revenue through gathering and processing activities, as well as downstream transportation and fractionation fees. 

Financially, the acquisition is projected to add around $0.04 of distributable cash flow per common unit in 2025 for Energy Transfer, with this figure potentially increasing to approximately $0.07 per common unit by 2027. 

Included in the acquisition is a 20% interest in the BANGL Pipeline, which spans approximately 683.97km and has an initial capacity of 125,000 barrels per day (bbl/d).  

This capacity can be expanded to more than 300,000bbl/d, connecting the Permian Basin to markets along the Texas Gulf Coast.