Energy Transfer makes $5B move to bolster US oil, gas assets

By Luke Geiver | September 17, 2019

Energy Transfer LP is spending $5 billion to expand its oil and natural gas transportation assets across multiple regions in the U.S. In a cash and share deal with SemGroup Corp., Energy Transfer will add a major deepwater ship channel near Houston, crude oil gathering assets in the DJ Basin and also other assets in the Anadarko Basin to its portfolio.

Through the merger with SemGroup, ET said it is paying a 65 percent premium to the closing price of SemGroup shares as of September 13 of this year.

The Houston Fuel Oil Terminal has 18.2 million barrels of crude oil storage capacity, five deep-water docks and seven barge docks. In addition to the HFOT asset, Energy Transfer said it will build a new 75-mile crude oil pipeline between the Houston ship channel and Nederland, Texas, to provide a connection between the two largest ship channels in the U.S. Between the two terminals, ET’s customers will have export capacity access to over two million barrels of oil per day. Commercial operations of the pipeline could begin in 2021.

For the other assets included in the deal, ET said they will greatly increase Energy Transfer’s crude oil and NGL transportation business in the Rockies and Mid-Continent and will complement Energy Transfer’s existing crude oil and NGL transportation business in the Permian Basin. Energy Transfer’s crude oil assets on the Gulf Coast will also benefit from the Maurepas Pipeline and its connections to the St. James refining complex. The acquisition will also provide a significant crude oil gathering and transportation presence in the Alberta Basin in western Canada.