Key Highlights:

• Joint venture combines crude oil and produced water gathering assets.

• Energy Transfer holds a 67.5% interest; Sunoco holds a 32.5% interest.

• More than 5,000 miles of pipelines and 11 million barrels of storage capacity.

• Effective date: July 1, 2024.

• Expected to be accretive to distributable cash flow per LP unit.

Source (PR Newswire)

Notable Quotes:

Our Take:

The formation of this joint venture between Energy Transfer and Sunoco is a strategic move that consolidates significant crude oil and produced water gathering assets in the Permian Basin, one of the most prolific oil-producing regions in the United States. By combining their assets, both companies aim to enhance operational efficiencies and maximize resource utilization.

Energy Transfer’s role as the operator leverages its extensive experience and infrastructure, ensuring seamless integration and management of the joint assets. The significant storage capacity and extensive pipeline network underscore the venture's robust logistical framework, positioning it to capitalize on the region's production capabilities.

Financially, the joint venture is poised to be immediately accretive to distributable cash flow per LP unit for both companies, highlighting its potential for delivering enhanced value to shareholders. This partnership not only strengthens the asset base of both entities but also aligns with their long-term growth and operational strategies in the energy sector.