Energy Transfer has agreed to acquire rival American midstream operator Crestwood Equity Partners in an all-stock deal worth around $7.1bn.

The consideration includes the assumption of $3.3bn of debt, based on the closing price on 15 August 2023.

As per the terms of the deal, unitholders of the New York Stock Exchange (NYSE) listed Crestwood Equity Partners will exchange each of their shares for 2.07 of Energy Transfer’s shares. The latter is also listed on NYSE.

After the closing of the deal, Crestwood Equity Partners’ common unitholders are anticipated to hold a stake of around 6.5% in Energy Transfer.

Based in Houston, Texas, Crestwood Equity Partners is a master limited partnership that owns and operates assets in various shale resource plays in the US.

Its gathering and processing assets are situated in the Williston, Delaware, and Powder River basins. These include a gas gathering capacity of around two billion cubic feet per day (bcf/day), a gas processing capacity of 1.4bcf/day, and a crude gathering capacity of 340,000 barrels per day (bpd).

Energy Transfer owns and operates close to 201,168km of pipeline and related energy infrastructure.

The deal will increase Energy Transfer’s position in the value chain deeper into the Delaware and Williston basins. Additionally, it will facilitate the limited partnership’s entry into the Powder River basin.

The assets to be added through the acquisition are expected to synergise with Energy Transfer’s existing downstream fractionation capacity at Mont Belvieu. They will also enhance the company’s hydrocarbon export capabilities from the Nederland Terminal in Texas as well as the Marcus Hook Terminal in Philadelphia, Pennsylvania.

Moreover, the transaction is expected to benefit Energy Transfer’s natural gas liquid (NGL) and refined products and crude oil operations by incorporating tactically situated storage and terminal assets. These assets encompass roughly 10 million barrels of storage capacity, alongside trucking and rail terminals.

Subject to Crestwood Equity Partners’ unitholders approval, regulatory approvals, and other customary conditions, the deal is anticipated to close in Q4 2023.

Earlier this year, Energy Transfer signed a cash and stock deal worth around $1.45bn to acquire Lotus Midstream Operations from an affiliate of EnCap Flatrock Midstream.