Energy Transfer buys Vaquero Midstream for $2.625bn

Energy Transfer buys Vaquero Midstream for $2.625 billionAnalysis

The deal adds a 300-mile Delaware Basin gathering and processing network to Energy Transfer's Permian system, funded with cash and new units.

By OGGN Staff·6 Oct 2026, 08:00·2 min read

A pumpjack in the Permian Basin, West Texas

Example of a pumpjack in the Permian Basin, not the site in this story. Photo: Quintin Soloviev, CC BY 4.0.

Energy Transfer LP will buy Vaquero Midstream LLC in a $2.625 billion bolt-on deal, the companies said. The price splits into $1.95 billion in cash and about 33.3 million newly issued Energy Transfer common units. The deal is expected to close in the fourth quarter of 2026, subject to regulatory approval and customary closing conditions.

Deal terms

Total value: about $2.625 billion
Cash: $1.95 billion
Equity: about 33.3 million new Energy Transfer common units
Expected close: fourth quarter of 2026

What Energy Transfer is picking up

Vaquero's roughly 300-mile pipeline network gathers and moves gas across some of the most active parts of the Delaware Basin, including Loving, Reeves, Ward and Winkler counties. Wellhead gathering lines and intrabasin transportation pipelines feed the Caymus Processing Complex, which runs three processing trains with a combined capacity of about 675 MMcf/d. Vaquero already holds enough acreage to add two more trains, which could push total processing capacity to roughly 1.2 Bcf/d.

How the cash flow is built

Vaquero's revenue runs on long-term, fee-based firm contracts and acreage dedications spanning about 100,000 dedicated acres. Its customer contracts average roughly 10 years of remaining life.

Why Energy Transfer wants it

Energy Transfer says the deal deepens its footprint in the Permian, adding access to growing natural gas and NGL volumes and tighter ties to its broader midstream platform. Vaquero's system already connects to Energy Transfer's downstream gas and NGL infrastructure, which the company expects to open new revenue from pipeline transportation, fractionation, terminalling and export services. Energy Transfer points to the Delaware Basin as one of the most active, lowest-cost oil and gas regions in North America. The company expects the acquisition to add to distributable cash flow per common unit immediately.

By the numbers

▪$2.625 billion total deal value
▪$1.95 billion cash plus about 33.3 million new Energy Transfer units
▪Caymus Processing Complex: 3 trains, about 675 MMcf/d, room to grow to about 1.2 Bcf/d
▪About 100,000 dedicated acres, contracts averaging about 10 years remaining
▪Expected close: Q4 2026

Why it matters

The deal adds fee-based, contracted gas gathering and processing capacity in one of the Permian's busiest, lowest-cost corners for producers. A processing complex with room to roughly double its capacity is a bet that Delaware Basin gas and NGL output keeps rising. Paying partly in cash and partly in new units lets Energy Transfer add the assets while still calling the deal accretive to cash flow per unit from day one.

What's next. Watch for the deal to close in the fourth quarter of 2026, once it clears regulatory approvalAfter that, the signal to track is whether Energy Transfer moves to build out Caymus's two unbuilt trains toward the 1.2 Bcf/d ceiling.

Sources