Energy Transfer LP has agreed to acquire Vaquero Midstream LLC in a $2.625-billion bolt-on deal to add natural gas gathering and processing assets in the southern Delaware basin of the Texas Permian.
Vaquero holds a 300-mile pipeline network that serves operators across the basin, including in Loving, Reeves, Ward, and Winkler Counties, Tex., and operates the Caymus processing complex in Coyanosa, Pecos County, Tex., near Waha, which includes three processing trains with 675 MMcfd capacity. The company owns acreage to support construction of two additional trains that could increase total processing capacity at the site to about 1.2 bcfd.
The Vaquero assets are interconnected with Energy Transfer’s downstream natural gas and NGL infrastructure, which Energy Transfer said could generate incremental revenue opportunities through pipeline transportation, fractionation, terminalling, and export services.
Vaquero is supported by long-term, fee-based contracts with average remaining life of 10 years, and 100,000 dedicated acres.
Consideration for the deal, which is expected to close in this year’s fourth quarter subject to customary conditions, consists of $1.95 billion in cash and about 33.3 million newly issued Energy Transfer common units.
Map detailing Energy Transfer and Vaquero Midstream assets in Delaware basin