Energy Transfer to Acquire Lotus Midstream for $1.45 Billion
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Energy Transfer and Lotus Midstream have entered into a definitive agreement to which Energy Transfer will acquire Lotus Midstream operations in a transaction valued at approximately $1.45 billion from an affiliate of EnCap Flatrock Midstream (EFM).
Consideration for the transaction will be comprised of $900 million in cash and approximately 44.5 million newly issued Energy Transfer common units. Lotus Midstream owns and operates Centurion Pipeline Company, an integrated, crude midstream platform located in the Permian Basin. The transaction is expected to close in the second quarter of 2023, subject to regulatory approval and customary closing conditions.
COMPLEMENTARY CRUDE GATHERING, TRANSPORTATION AND STORAGE ASSETS
Lotus Midstream’s Centurion Pipeline Company provides a full suite of midstream services including wellhead gathering, intra-basin transportation, terminalling and long-haul transportation services. Its expansive system, encompassing approximately 3,000 active miles of pipeline, covers major production areas of the Permian with nearly 1.5 million barrels per day of capacity. Lotus Midstream’s Midland Terminal offers 2 million barrels of crude oil storage capacity and additional supply and demand connectivity. The acquisition also includes a 5 percent equity interest in the Wink to Webster Pipeline, a 650-mile pipeline system transporting more than one million barrels per day of crude oil and condensate from the Permian Basin to the Gulf Coast.
Energy Transfer’s acquisition of Lotus Midstream’s Centurion Pipeline assets will increase the partnership’s footprint in the Permian Basin and provide increased connectivity for its crude oil transportation and storage businesses. The Centurion assets, located across some of the most active areas of the Permian Basin, provide significant gathering volumes from key producers while also enhancing Energy Transfer’s access to key downstream markets with consistent sources of demand. The assets provide direct access to major hubs including Cushing, Midland, Colorado City, Wink, and Crane. The system is anchored by large cap producer customers with firm, long-term contracts, and significant acreage dedications.
Upon closing, Energy Transfer expects to begin construction on a 30-mile pipeline project that will allow Energy Transfer and its customers the ability to originate barrels from its Midland terminals for ultimate delivery to Cushing. This project is expected to be completed in the first quarter of 2024.
About Energy Transfer
Energy Transfer owns and operates one of the largest and most diversified portfolios of energy assets in the United States, with approximately 120,000 miles of pipeline and associated energy infrastructure. Energy Transfer’s strategic network spans 41 states with assets in all of the major U.S. production basins. Energy Transfer is a publicly traded limited partnership with core operations that include complementary natural gas midstream, intrastate and interstate transportation and storage assets; crude oil, natural gas liquids, and refined product transportation and terminalling assets; and NGL fractionation. Energy Transfer also owns Lake Charles LNG Company, as well as the general partner interests, the incentive distribution rights and approximately 34 percent of the outstanding common units of Sunoco, and the general partner interests and approximately 47 percent of the outstanding common units of USA Compression Partners.
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