Sunoco Logistics acquiring Energy Transfer
NEW YORK – Sunoco Logistics Partners L.P. is buying rival Energy Transfer Partners in a stock deal worth about $20 billion that the energy companies’ hope will boost their operations.
The deal, announced Monday, comes as Energy Transfer Partners remains at the center of controversy over the Dakota Access oil pipeline that will transfer oil from North Dakota to Illinois. Construction of the $3.8 billion pipeline has been the object of protests for months by the Standing Rock Sioux, whose reservation lies near the pipeline route, and the tribe’s allies, who fear a leak could contaminate their drinking water.
Energy Transfer shareholders will receive 1.5 common units of Sunoco stock for each Energy transfer share they own. Based on Sunoco’s closing price Friday, the deal was worth about $21.31 billion.
The deal is expected to close in the first quarter. The companies said they expect the deal to produce more than $200 million in commercial benefits and savings annually by 2019.
Both companies have active projects in and related to the natural gas being extracted from the Marcellus Shale. In March, Sunoco Logistics said its Mariner East 1, the first pipeline in the larger Mariner East system, had begun transporting both ethane and propane to the Marcus Hook Industrial Complex in Delaware County. The company is also building Mariner East 2, an expansion of the mariner East system with origin points in Ohio, West Virginia and Western Pennsylvania, expected to be completed in the first half of 2017 and will add an additional capacity of 275,000 barrels per day of natural gas liquids, primarily propane and butane, from both the Marcellus and Utica shales.
Energy Transfer is building the Rover Pipeline, a 700-mile project to reach markets in the Midwest. A 10.59 mile portion of Rover will originate at a compressor station Energy Transfer is building in Smith Township.
Kelcy Warren, current chairman of Energy Transfer, will be CEO of the new company. Michael J. Hennigan is currently CEO of Sunoco Logistics and is expected to have a management role with other executives after the deals.