The deal will give Energy Transfer increased connectivity for its natural gas and NGL transportation businesses
The assets of Enable Midstream include natural gas, crude oil, condensate and produced water gathering pipelines. (Credit: Tobias Lindner from Pixabay)
Energy Transfer has agreed to acquire rival US midstream company Enable Midstream Partners for about $7.2bn.
Based in Oklahoma, Enable Midstream’s assets include nearly 22,530km of natural gas, crude oil, condensate, and produced water gathering pipelines.
The assets consist of nearly 12,552km of interstate pipelines and around 3,540km of intrastate pipelines.
The company also has seven natural gas storage facilities, which have a combined storage capacity of 84.5 billion cubic feet (bcm).
Enable Midstream has a processing capacity of around 2.6 billion cubic feet per day (Bcf/d) of natural gas. The company’s gas gathering and processing assets are located in the Arkoma basin across Oklahoma and Arkansas, and also in the Haynesville Shale in East Texas and North Louisiana.
Energy Transfer said that the acquisition will grow its presence in multiple regions, Besides, it will give increased connectivity for its natural gas and natural gas liquids (NGL) transportation businesses.
The Texas-based firm said that the deal will help it bolster its NGL infrastructure through the addition of natural gas gathering and processing assets in the Anadarko Basin in Oklahoma.
In addition, it will also allow the company to integrate high-quality assets with its existing NGL transportation and fractionation assets located on the US Gulf Coast.
Energy Transfer stated: “The combination of Energy Transfer’s significant infrastructure with Enable’s complementary assets will allow the combined company to pursue additional commercial opportunities and achieve cost savings while enhancing Energy Transfer’s ability to serve customers.
“Energy Transfer expects the combined company to generate more than $100 million of annual run-rate cost and efficiency synergies, excluding potential financial and commercial synergies.”
As per the terms of the deal, Enable Midstream’s shareholders will be issued 0.8595 Energy Transfer shares for each Enable Midstream common unit.
OGE Energy, which holds 25.5% limited partner interest and 50% general partner interest in Enable Midstream announced its support to the merger agreement. The company, which owns Oklahoma Gas and Electric, said that the merger would help it become a pure-play electric utility.
After the closing of the deal, Enable Midstream’s shareholders are expected to hold a stake of nearly 12% in Energy Transfer.
The deal, which is subject to the meeting of customary closing conditions, is expected to close in mid-2021.