July 17, 2024 [Storage Terminals Magazine]- Energy Transfer LP and Sunoco LP have announced the formation of a joint venture combining their respective crude oil and produced water gathering assets in the Permian Basin.

Energy Transfer will act as the operator of the joint venture and will contribute its Permian crude oil and produced water gathering assets and operations. Sunoco will contribute all its Permian crude oil gathering assets and operations to the joint venture. Notably, Energy Transfer’s long-haul crude pipeline network, which transports crude oil out of the Permian Basin to Nederland, Houston, and Cushing, is excluded from the joint venture.

The joint venture will operate over 5,000 miles of crude oil and water gathering pipelines and will have a crude oil storage capacity exceeding 11 million barrels.

Energy Transfer will hold a 67.5 percent interest in the joint venture, while Sunoco will hold the remaining 32.5 percent interest.

The formation of the joint venture has an effective date of July 1, 2024, and is expected to be immediately accretive to distributable cash flow per LP unit for both Energy Transfer and Sunoco.

Intrepid Partners, LLC served as the financial advisor to Energy Transfer’s conflicts committee, while Guggenheim Securities, LLC served as the financial advisor to Sunoco’s special committee. Potter Anderson & Corroon LLP acted as Delaware counsel for Energy Transfer’s conflicts committee, and Richards, Layton & Finger, P.A. acted as Delaware counsel for Sunoco’s special committee. Additionally, Vinson & Elkins LLP and Akin Gump Strauss Hauer & Feld LLP provided legal counsel to the partnerships on the transaction.

This strategic collaboration between Energy Transfer and Sunoco aims to enhance their operational efficiencies and strengthen their market presence in the Permian Basin.