Energy Transfer, a US pipeline operator, and Sunoco, a fuel distributor, have teamed up to form a joint venture (JV) that will combine their crude oil and produced water-gathering operations in the Permian Basin, US. 

The JV will be led by Energy Transfer, which will contribute its assets and operations and own a 67.5% stake. 

Sunoco will contribute its assets to the JV in exchange for a 32.5% interest. 

The JV, created on 1 July 2024, will manage a network comprising more than 8,000km of pipelines and crude oil storage capacity exceeding 11 million barrels.  

However, the agreement does not include Energy Transfer's long-distance crude oil pipeline network that moves crude oil from the Permian Basin to Nederland, Houston, and Cushing. 

The collaboration is projected to benefit both parties, with expectations that it will promptly enhance distributable cash flow per limited partner unit for Energy Transfer and Sunoco. 

Intrepid Partners provided financial advisory services to Energy Transfer's conflicts committee while Guggenheim Securities served Sunoco's special committee for the transaction. 

Potter Anderson & Corroon and Richards, Layton & Finger, P.A. provided legal counsel to Energy Transfer and Sunoco, respectively. 

Recently, Energy Transfer expanded its Permian Basin footprint by acquiring WTG Midstream. 

WTG Midstream provides various midstream services and owns a pipeline network stretching approximately 9,656km.  

Moreover, the $3.25bn agreement adds eight gas processing facilities with a combined capacity of nearly 1.3 billion cubic feet per day to Energy Transfer’s holdings, along with two additional plants currently being built. 

One of these new plants is scheduled to begin operations in the third quarter (Q3) of 2024, and the second is expected to follow in Q3 2025.