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Fueling A Stronger Nation: How Mid-Market US Pipeline Companies Are Mastering Mergers and Acquisitions

In mid-March 2023, a number of US energy pipeline and storage operator firms are anticipating the M&A wave to hit the midstream industry. The energy industry holds immense significance in the US economy, security, and daily lives of Americans.

The midstream sector is currently comprised of only a few large operators but a lot of mid-sized firms that deliver energy services across the country. Mergers and acquisitions will result in more large companies/operators to supply energy services.

CEO Michael Dunn told Reuters said, “Scale is definitely important. Continuing to expand is certainly one of our goals.”

Reuters reports that, as of March 21, 2024, the year is poised to set a record for midstream mergers and acquisitions if the present rate continues, with deals worth $12.5 billion already announced by mid-March, marking the most active period since 2019.”

The following US energy pipeline companies are moving into the merger deals wave.

  • Magellan Midstream was bought by Oneok in 2023, this natural gas company intends to expand into refined products and crude oil transportation.
  • In 2024, Sunoco (SUN.N) will acquire NuStar (NS,N), a storage provider for $3.9 billion.
  • Still in 2024, EQT Corp (EQT.N) announced to acquire its former spinoff, Equitrans Midstream (ETRN.N) for $5.5 billion.

Other merger deals in the works are as follows:

  • Reuters reported in February 2024, Occidental Petroleum (OXY.N) is strategically deliberating options for its controlling stake in Western Midstream Partners.
  • Summit Midstream Partners (SMLP.N) last week said it was in the advanced stages of a review of strategic alternatives.

The merger and acquisition movement in the midstream sector is definitely now reshaping the natural gas, crude oil and refined products industry. Larger scale companies will be a win-win for the industry due to the delivery of more services and more profitability.

“As these (producers) have been getting bigger, said Jefferies’ Bowden, one would expect this to be followed by a renewed focus on the part of the midstreamers to follow suit.”

The impending facelift to the energy industry through mergers and acquisitions will result in improvements in energy distribution throughout the country, economic impact, security and the American quality of life.

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