Energy Transfer has concluded the $1.45bn acquisition of Lotus Midstream Operations from an affiliate of EnCap Flatrock Midstream.
As per the terms of the deal, which was first announced in March this year, the company made a cash payment of $900m and issued 44.5 million new Energy Transfer shares.
The acquired company owns and operates Centurion Pipeline Company, an integrated crude oil logistics platform in the Permian Basin.
It offers a full suite of midstream services including intra-basin transportation, wellhead gathering, terminals and long-hour transportation services.
The deal has added approximately 3,000 miles (4,800km) of crude oil gathering and transportation pipelines to Energy Transfer’s portfolio.
Lotus Midstream’s pipelines extend from south-east New Mexico across the Permian Basin of West Texas to Cushing, Oklahoma.
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Energy Transfer noted that it is now working to integrate operations and assets including the construction of a 30-mile pipeline and terminal optimisation project.
With the acquisition, the company’s storage capacity in Midland, Texas, is expected to increase by nearly two million barrels.
The deal also covered a 5% interest in the Wink to Webster Pipeline, a 650-mile crude oil pipeline system that supplies more than one million barrels per day of crude oil and condensate to the Gulf Coast from the Permian Basin.
The integration is expected to augment connectivity within the Permian Basin and offer a direct link between Midland and Cushing.
Furthermore, Energy Transfer raised its adjusted EBITDA forecast for 2023 from $12.9bn–13.3bn to between $13.05bn and $13.45bn because of the acquisition and rising energy demand.
Energy Transfer now anticipates that its 2023 growth capital expenditures will total around $2bn.
Energy Transfer also raised its adjusted EBITDA forecast for 2023 because of the acquisition.