Energy Transfer agreed to acquire Vaquero Midstream in a transaction valued at $2.625 billion, expanding its natural gas infrastructure in the Permian Basin.

The deal comprises $1.95 billion in cash and 33.3 million newly issued common units. 

Vaquero’s assets include a 300-mile pipeline network, three processing trains and total processing capacity of 675 million cubic feet per day in the southern Delaware Basin. 

The system is supported by 100,000 dedicated acres and contracts with an average remaining term of 10 years.

Energy Transfer expects the acquisition to immediately increase distributable cash flow per common unit.

 Completion is targeted for the fourth quarter of 2026, subject to regulatory approval and customary closing conditions.

The transaction follows strong second-quarter results, with revenue rising 78.4 per cent year-on-year to $34.33 billion. 

Diluted earnings per share reached $0.59, exceeding the consensus estimate of $0.38.