Energy Transfer LP has announced its acquisition of Vaquero Midstream LLC for approximately $2.625 billion. This transaction includes $1.95 billion in cash and around 33.3 million newly issued Energy Transfer common units, anticipated to close in Q4 2026, pending regulatory approval.
Key Highlights:
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Asset Overview:
- 300-mile Pipeline Network: Vaquero’s gathering network in the Delaware Basin spans 300 miles, serving key areas such as Loving, Reeves, Ward, and Winkler counties.
- Caymus Processing Complex: The facility includes three processing trains with a total capacity of about 675 million cubic feet per day (MMft³/d) and the potential for expansion to approximately 1.2 billion cubic feet per day (Bft³/d).
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Financials and Operations:
- The acquisition strengthens Energy Transfer’s footprint in the Permian Basin by enhancing access to natural gas and NGL production.
- Vaquero’s system operates on long-term, fee-based contracts, providing stable cash flow with an average remaining contract life of about 10 years.
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Strategic Integration:
- The assets are already interconnected with Energy Transfer’s existing infrastructure, potentially generating new revenue streams through pipeline transport, fractionation, and export services.
- This move is expected to increase Energy Transfer’s operational capabilities in one of North America’s most productive and cost-effective regions.
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Financial Impact:
- The acquisition is projected to be immediately accretive to Energy Transfer’s Distributable Cash Flow (DCF) per common unit.
Overall, this acquisition positions Energy Transfer to capitalize on ongoing developments in the Delaware Basin, signaling potential long-term growth opportunities within their existing infrastructure network.
