Energy Transfer to Buy Vaquero Midstream for $2.63 Billion in Permian Gas Expansion

Energy Transfer agreed to acquire Vaquero Midstream in a cash-and-stock transaction valued at about $2.63 billion, expanding its natural-gas gathering and processing footprint in the Southern Delaware Basin.

The deal adds roughly 300 miles of pipeline and a large processing complex to Energy Transfer’s network, giving the company more exposure to one of the most active oil and gas regions in the United States.

Energy Transfer expands in the Permian Basin

Vaquero operates infrastructure in the Southern Delaware Basin, part of the wider Permian region. The company’s Caymus Processing Complex can handle about 675 million cubic feet of natural gas per day.

Natural gas produced alongside oil must be gathered, processed and moved to market. Midstream companies earn fees by operating the infrastructure that connects producers with pipelines, storage facilities and export terminals.

Why the acquisition fits Energy Transfer

Energy Transfer already owns a broad network of natural-gas, natural-gas-liquids and export infrastructure. Adding Vaquero’s system could increase the amount of gas moving through other parts of that network.

The company expects the acquisition to contribute volumes to transportation, fractionation, terminal and export businesses.

Deal structure and timing

Reuters reported that the transaction includes about $1.95 billion in cash and roughly 33.3 million newly issued Energy Transfer shares. The deal is expected to close in the fourth quarter of 2026, subject to customary conditions.

Vaquero’s assets are backed by fee-based contracts covering about 100,000 dedicated acres, with average contract terms of around 10 years. Long-term fee agreements can provide more predictable cash flow than direct exposure to commodity prices.

Why midstream consolidation is continuing

Pipeline and processing companies increasingly seek scale because larger networks can move more products across more routes and create opportunities for exports and downstream services.

Consolidation can also reduce duplicated infrastructure and improve utilization, although large acquisitions carry integration and financing risks.

What to watch next

Investors will monitor regulatory approval, integration costs and whether expected volumes materialize. They will also watch Energy Transfer’s broader capital-spending plan, which remains substantial.

The transaction reinforces the importance of U.S. natural-gas infrastructure as domestic demand, LNG exports and power-sector consumption continue to evolve.

Source

Based on same-day reporting from Reuters.