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Two Energy Transfer subsidiaries to merge in deal valued at $19.9 billion

HOUSTON, November 21, 2016 (PCW) – Sunoco Logistics Partners and Energy Transfer Partners, two master limited partnerships in the larger Energy Transfer family, announced Monday they would merge in a unit-for-unit deal valued around $19.9 billion.

The transaction has already been approved by the boards of directors and conflicts committees of both partnerships and is expected to close in the first quarter of 2017, subject to unitholder approval and other customary closing conditions.

After the deal closes, the combined partnership will be helmed by CEO Kelcy Warren, chief commercial officer Mackie McCrea, president Matt Ramsey and CFO Tom Long. Warren is the current CEO and co-founder of Energy Transfer, McCrea is the current CCO of Energy Transfer Equity, Ramsey is the current president and COO of ETP and Long is the group chief financial officer of ETE.

Current Sunoco CEO Mike Hennigan will “continue in leading management roles of the combined company,” a company release stated. The Sunoco Logistics business will continue to be headquartered in Philadelphia.

ETP owns and operates several major natural gas and natural gas liquids pipelines in the US, totaling about 62,500 miles. It also owns several NGL storage, fractionation and transportation assets. Sunoco owns and operates an NGL, crude and refined products logistics business that includes pipeline, terminaling, storage and marketing assets.

The move comes on the back of Canadian firm Enbridge’s $28 billion buyout of fellow midstream firm Spectra Energy in September. Consolidation in the midstream sector is increasingly occurring as firms seek to cut operational and capital costs by finding synergistic opportunities, amid a softer commodity environment. -- Samantha Hartke

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