It’s not just the upstream part of the Permian that is in the midst of major consolidation. Over the past two years, there have been a number of major M&A deals in the midstream space, most recently Energy Transfer’s $1.45 billion plan to acquire Lotus Midstream. Backed by private equity, Lotus has assembled an impressive array of long-haul crude oil gathering, storage and pipeline assets in West Texas and Southeast New Mexico, including the Centurion Pipeline System that links the Permian with the crude oil center at Cushing, OK. . In today’s RBN blog, we discuss the deal and what it means for Energy Transfer, whose role in the U.S.’s most prolific crude oil-focused production area is about to expand by leaps and bounds.
In the late 2010s, when Permian production was rising rapidly, mid-sized companies active in the field were on a development spree, rapidly adding new gathering systems, takeaway pipelines and other infrastructure to simply try to keep up. But when production declined with the onset of the COVID pandemic, many midstreamers were forced to compete to keep their pipelines full, and many projects that were being planned were delayed or canceled, as we detail a Finish what you started. In the two years since then, there has been a flurry of Permian midstream M&A activity, a phenomenon we’ve tracked in individual blogs and in a four-part series we continue today. Here are some examples of our coverage in 2021 and 2022:
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