Energy Transfer LP announced on Monday that it had acquired pipeline operator Lotus Midstream. It is for a a $1.45 billion cash-and-stock deal to boost its presence in the Permian Basin.
The acquisition is expected to solidify ET as one of the top midstream companies in the region. It will also provide greater access to crucial markets for both producers and consumers.
The acquisition includes Lotus Midstream’s Centurion Pipeline assets. It is giving Energy Transfer access to more than 1,000 miles of pipelines and related infrastructure in West Texas. This will allow Energy Transfer to increase its capacity for transporting crude oil, natural gas liquids (NGLs), and other hydrocarbons from production sites in the Permian Basin to refining centers along the Gulf Coast.
The deal also includes an agreement with Plains All American Pipeline LP (PAA) that will allow Energy Transfer access to PAA’s existing network of pipelines and storage facilities in the region. This agreement is expected to significantly expand Energy Transfer’s presence in the Permian Basin by providing additional transportation options for producers and consumers alike.
In addition, Energy Transfer has agreed to acquire a 50% interest in certain NGL processing assets owned by Lotus Midstream. These assets include fractionation plants located near Odessa, Texas, capable of processing up to 40,000 barrels per day (bpd) of NGLs into ethane, propane, butane, and other products used by petrochemical manufacturers.
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