The deal would expand ETP geographic footprint as it aims to boost its presence in the transportation, terminalling and logistics of crude oil, NGLs and refined products.
ETP will also gain Sunoco’s 32.4% interest in Sunoco Logistics Partners’ common units, owned by Sunoco’s general partner and Sunoco’s branded retail business, which has a portfolio of about 4,900 retail locations in the US.
ETP chief executive officer and chairman of the board of directors Kelcy Warren said the company’s goal is to derive more of the distributable cash flow from the transportation of heavier hydrocarbons like crude oil, NGLs, and refined products.
"With this transaction, we make a major move in that direction, bringing our cash flow mix related to the combined enterprise’s pipeline businesses to approximately 70 percent natural gas and 30 percent heavier hydrocarbons," added Warren.
Sunoco president and chief executive officer Brian P. MacDonald said, "ETP has an interest in growing its Marcellus Shale-related activity, and I am pleased that the combined enterprise will retain a strong Pennsylvania presence."
Sunoco shareholders will receive 20% of ETP common units and $965m of Sunoco’s existing notes will remain outstanding after the closing of the deal.
The deal has been approved by each company’s board of directors and is expected to close in the third or fourth quarter of this year.
Sunoco stated its logistics and retail businesses will continue to have headquarters in Philadelphia, US and the company will continue its plans for exiting its refining business.
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