The oil price rally came…
According to Bloomberg, the backlog…
Energy Transfer Partners LP, the Dallas based Fortune 500 natural gas company which owns more than 17,500 miles of natural gas pipelines, has agreed to buy Sunoco Inc. for $5.3 billion; a deal that will add oil terminals and transportation assets to its portfolio.
Darren Horowitz, an analyst at Raymond James & Associates Inc. in Houston, said that the takeover “opens the door for greater growth,” allowing Energy Transfer to meet its goal of diversifying both the extent of the company’s pipeline network and the products that it ships.
Energy Transfer will receive 4,900 Sunoco retail fuelling stations around the US, as well as a 32.4% share of Sunoco Logistics Partners LP’s 7,900 miles of oil pipelines. Last month Energy Transfer also bought Southern Union Co. for $5.4 billion, almost doubling its initial pipeline network. They intend to convert some of their new, super-sized network of natural gas pipelines into crude oil pipes because the profits in crude are far higher than those of gas.
Chairman and CEO of Energy Transfer, Kelcy Warren, stated that the “goal is to derive more of our distributable cash flow from the transportation of heavier hydrocarbons like crude oil, NGLs, and refined products.”
The deal has been approved by both boards and now just needs the approval from shareholders and regulators. It is expected to be finalised in the second half of this year.
By. Charles Kennedy of Oilprice.com
For the latest oil prices visit our homepage.
Charles is a writer for Oilprice.com