Energy Transfer Expands Texas Gas Network with $2.6 Billion Deal
Dallas, Tuesday, 6 October 2026.
Energy Transfer will acquire Vaquero Midstream for $2.625 billion, expanding its Permian Basin pipeline capacity to capture rising natural gas demand driven by power-hungry data centers and U.S. exports.
Energy Transfer Announces $2.625 Billion Acquisition
Energy Transfer LP (NYSE: ET) announced on Tuesday, October 6, 2026, a definitive agreement to acquire Vaquero Midstream LLC in a transaction valued at approximately $2.625 billion [1][2]. The deal consists of $1.95 billion in cash and approximately 33.3 million newly issued Energy Transfer common units [2][4]. Cash represents 74.286 percent of the total consideration, highlighting the significant liquidity deployed to secure the assets [1][5]. This bolt-on acquisition is expected to strengthen Energy Transfer’s gathering and processing capabilities in the Delaware Basin, enhancing midstream network connectivity [1][3].
Strategic Assets in the Delaware Basin
Vaquero Midstream operates a natural gas gathering and processing system in the Southern Delaware Basin of Texas, including an approximately 300-mile pipeline network [2][5]. The infrastructure spans Loving, Reeves, Ward, and Winkler counties, serving major operators in some of the most active areas of the basin [1][3]. Central to the assets is the Caymus Processing Complex, which consists of three units with a total capacity of approximately 675 million cubic feet per day [2][6]. Vaquero also owns sufficient land to build two additional units, potentially increasing total processing capacity to approximately 1.2 billion cubic feet per day [1][6].
Market Drivers and Operational Synergies
The acquisition aligns with rising natural gas demand driven by booming U.S. exports and the development of power-hungry data centers [3][4]. Vaquero’s facilities are already connected to Energy Transfer’s downstream natural gas and natural gas liquids infrastructure, creating synergies across the value chain [1][5]. This connectivity is expected to generate additional revenue through pipeline transportation, fractionation, terminal storage, and export services [1]. Vaquero’s revenue is underpinned by approximately 100,000 dedicated acres and high-quality customers committed for an average remaining term of approximately 10 years [2][5].
Transaction Timeline and Financial Impact
The transaction is expected to close in the fourth quarter of 2026, subject to regulatory approvals and customary closing conditions [2][3]. Energy Transfer expects Vaquero’s assets to immediately contribute to growth in distributable cash flow (DCF) per common unit [1][6]. Financial advisors for the transaction include J.P. Morgan Securities LLC for Energy Transfer and Houlihan Lokey for Vaquero [2][3]. This move follows Energy Transfer’s 2024 acquisition of WTG Midstream, continuing a strategy of expansion in the Permian footprint [3][5].