Energy Transfer and Sunoco have established a crude oil joint venture (JV) in the Permian Basin in the US by merging their respective crude oil and produced water gathering assets in the region.
The joint venture will oversee more than 8,046km of crude oil and water gathering pipelines and possess crude oil storage capacity exceeding 11 million barrels.
Energy Transfer will hold a 67.5% stake in the joint venture, while Sunoco will hold the remaining 32.5%. The former will be the operator of the joint venture and contribute its Permian crude oil and produced water gathering assets and operations.
Sunoco will add all of its Permian crude oil gathering assets and operations to the joint venture.
Energy Transfer’s long-haul crude pipeline network, which transports crude oil from the Permian Basin to Nederland, Houston, and Cushing, has been excluded from the joint venture.
The formation of the joint venture is expected to immediately enhance distributable cash flow per limited partnership (LP) unit for both Energy Transfer and Sunoco.
Intrepid Partners served as the financial adviser to the conflicts committee of Energy Transfer. Sunoco’s special committee, on the other hand, was provided financial advisory services from Guggenheim Securities.
Legal counsel for Energy Transfer’s conflicts committee was provided by Potter Anderson & Corroon, while Richards, Layton & Finger acted as Delaware counsel for Sunoco’s special committee.
Additionally, Vinson & Elkins and Akin Gump Strauss Hauer & Feld served as legal counsel to the partnerships for the deal.
Energy Transfer, a publicly traded company on the New York Stock Exchange (NYSE), owns and manages a diverse array of energy assets in the US, encompassing more than 209,000km of pipelines and associated infrastructure. Its network spans 44 states and includes assets located in all main production basins in the US.
Sunoco, also listed on the NYSE, operates as a master limited partnership focused on energy infrastructure and fuel distribution. Its operations extend across over 40 US states, Puerto Rico, Europe, and Mexico.
The midstream activities of Sunoco feature a network comprising approximately 22,530km of pipelines and more than 100 terminals.
Earlier this week, Energy Transfer expanded its network in the Midland Basin with the acquisition of WTG Midstream.
