Energy Transfer has agreed to acquire Delaware Basin midstream operator Vaquero Midstream for approximately $2.63 billion, a deal that brings 675 MMcf/d of Permian gas processing capacity, roughly 300 miles of gathering pipeline and around 100,000 dedicated acres into the buyer's 140,000-mile US network.

The companies target a fourth-quarter 2026 close, subject to regulatory clearance and standard closing conditions. Energy Transfer will fund the purchase with $1.95 billion in cash and approximately 33.3 million newly issued common units.

What assets does Vaquero bring?

Vaquero's footprint sits entirely in the Delaware sub-basin of the Permian, anchored by a gathering and intrabasin transportation network spanning roughly 300 miles of pipeline across Loving, Reeves, Ward and Winkler counties in western Texas.

The Caymus Processing Complex forms the centrepiece of the package, housing three processing plants with a combined capacity of approximately 675 MMcf/d. Vaquero also controls adjacent acreage earmarked for up to two additional processing trains, which, if constructed, would lift the complex's total capacity to approximately 1.2 Bcf/d.

The system serves around 100,000 dedicated acres under long-term, fee-based contracts. Those contracts reportedly average about ten years in duration, with acreage dedications providing the structural underpinning for throughput.

What does Energy Transfer see in the deal?

Energy Transfer framed the acquisition in volume and downstream terms. "The acquisition would increase on-system natural gas and natural gas liquids volumes and bolster connectivity within the region," the company said.

Existing interconnections between Vaquero's gathering system and Energy Transfer's downstream infrastructure are expected to open opportunities in transportation, fractionation, terminalling and export services.

Energy Transfer stated it expects the transaction to be immediately accretive to distributable cash flow per common unit, a metric closely tracked by MLP unit holders.

How does the deal fit Energy Transfer's wider footprint?

Energy Transfer operates approximately 140,000 miles of pipelines and associated assets across 44 states, covering natural gas midstream, transportation, storage, crude oil and refined products. The Vaquero deal layers additional Delaware-basin gathering and processing on top of the buyer's existing Permian position, a region that has continued to draw midstream capital despite softer commodity prices.

Who is advising on the transaction?

JP Morgan Securities is acting as financial adviser to Energy Transfer, with Sidley Austin serving as legal counsel. Vaquero's advisers are Houlihan Lokey on the financial side and Willkie Farr & Gallagher on legal matters.

What to watch

Closing is slated for the fourth quarter of 2026, contingent on regulatory approval and standard closing conditions. Watch items include the Hart-Scott-Rodino review timeline, any FERC notifications tied to the natural gas interconnections, and the Texas Railroad Commission's posture toward the Loving, Reeves, Ward and Winkler county footprint. A separate question is whether Energy Transfer moves forward with the two additional Caymus processing trains, which would lift the complex to roughly 1.2 Bcf/d.