Energy Transfer to acquire SemGroup in $5-billion deal

Energy Transfer LP will acquire SemGroup Corp. in a deal valued at $5 billion, the acquiring company reported Sept. 16. The acquisition will increase Energy Transfer’s scale across multiple regions and provide increased connectivity for its crude oil and NGL transportation businesses, the company said.

Assets acquired include the Houston Fuel Oil Terminal (HFOT) on the Houston Ship Channel with 18.2 million bbl of crude oil storage, five deepwater ship docks, and seven barge docks. Energy Transfer plans to build a crude oil pipeline, the Ted Collins pipeline, to connect HFOT to Energy Transfer’s Nederland, Tex., terminal.

Energy Transfer’s acquisition also will add crude oil gathering in the DJ basin in Colorado and the Anadarko basin in Oklahoma and Kansas, as well as crude oil and NGL pipelines connecting both to crude oil terminals in Cushing, Okla. The acquisition likewise will give Energy Transfer a crude oil gathering and transportation presence in western Canada’s Alberta basin. Energy Transfer’s crude oil assets on the Gulf Coast will further benefit from incorporating the Maurepas Pipeline and its connections to the St. James refining complex, the company said.

The multibillion-dollar transaction price, which includes assumption of debt, is based on a unit and cash transaction valued at the $17/share Sept. 13 closing price of Energy Transfer common stock.

The 75-mile, 500,000-b/d Ted Collins pipeline, in conjunction with the combined companies’ other oil transportation assets, will provide immediate access to more than 1 million b/d of crude oil export capacity, with plans to expand to more than 2 million b/d at the Nederland and the HFOT terminals. Energy Transfer anticipates commercial operations to begin in 2021.

Energy Transfer plans to expand its Nederland terminal to handle very large crude carriers.