Energy Transfer (ET) picked up a G&P system in the Powder River Basin (PRB) when it bought Crestwood Equity in 2023 for $7.1B. Since then, the company’s growth machine has been squarely pointed at the Permian and Gulf Coast, leaving Wyoming as increasingly non-core.
The PRB assets include the Jackalope gathering system and the Bucking Horse I/II cryogenic plants in Converse County, WY (see map from ET). Jackalope includes ~180 miles of gathering line and primarily serves Continental Resources, Occidental Petroleum and Anschutz. The Bucking Horse plants have total processing capacity of 345 MMcf/d and deliver residue gas to Kinder Morgan’s (KMI) Wyoming Interstate system. East Daley’s “G&P System Analysis” dashboard in Energy Data Studio shows throughput of ~100 MMcf/d through the plants (see figure below).
Why the PRB assets screen as non-core:
- Strategy mismatch. ET’s current spending is dominated by Permian gas/NGL expansions (processing at Red Lake/Badger, fractionation at Mont Belvieu), NGL terminal expansions at Nederland and Marcus Hook, and long-haul gas pipelines. The Powder River is not a focus of growth.
- Marginal earnings impact. ET has guided to $16.1–16.5B of 2025 Adj. EBITDA, leaving the PRB system at well under 1% of the total. This is consistent with a divestible, niche position in ET’s large portfolio.
- Outside core operations. Since the Crestwood deal closed, ET has expanded its Permian footprint, including the $3.25B WTG Midstream acquisition and its Permian crude/water JV with Sunoco. Wyoming has not factored into the company’s dealing.
Who would buy it?
- Western Midstream (WES). WES expanded in the Powder River by buying Meritage Midstream, giving the company a large G&P footprint in Wyoming. The Jackalope/Bucking Horse assets would expand its footprint and create potential synergies for shared customers.
- Tallgrass Energy. Tallgrass also operates Powder River midstream assets, including the nearby Casper and Douglas processing plants and Tallgrass Interstate Gas Transmission (TIGT). Folding in Jackalope/Bucking Horse could lift volumes on TIGT and strengthen one-stop midstream services in the basin.
What changes for ET: A sale would allow Energy Transfer to marginally delever while it continues to commit resources to Permian gas and NGL projects.
Investor Takeaway: The PRB system is a logical non-core candidate for ET – small, remote, and overshadowed by Permian and Gulf Coast growth opportunities. A sale could unlock strategic value for the right buyer, with immaterial earnings impact to ET. – Jaxson Fryer Tickers: ET, KMI, WES.
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