Energy Transfer has completed the acquisition of Tulsa-based SemGroup for $5.1 billion.
The combined operations of the two companies are expected to generate annual run-rate efficiencies of more than $170 million, consisting of commercial and operational synergies of $80 million, financial savings of $50 million and cost savings of $40 million.
Energy Transfer’s acquisition of SemGroup’s Houston Fuel Oil Terminal (HFOTCO) strengthens its crude oil transportation, terminalling and export capabilities, and provides the company with a strategic position on the Houston Ship Channel. HFOTCO has more than 18 million barrels of crude oil storage capacity, five deep-water ship docks and seven barge docks.
Energy Transfer is building the Ted Collins pipeline, a 75-mile crude line that will connect the terminal to the company’s Nederland terminal. The pipeline is expected to be in service in 2021, and will have an initial capacity of 500 million barrels per day.
The company says that this acquisition expands its pipeline footprint by adding crude oil and NGL gathering systems and transmission lines in the DJ Basin in Colorado and the Anadarko Basin in Oklahoma and Kansas with connections to crude oil terminals in Cushing, Oklahoma. The acquisition will also provide a significant natural gas gathering and processing presence in the Alberta Basin in western Canada.