Sept 24 (Reuters) - Oil and gas firms Diamondback Energy ( FANG )

and Kinetik Holdings ( KNTK ) on Tuesday said they

acquired a 30% equity interest in the EPIC Crude pipeline

system.

The companies will each own 27.5% of EPIC Crude, while

parent EPIC Midstream will continue to own a 45% stake in the

pipeline.

WHY IT IS IMPORTANT

The consolidation wave in the U.S. energy sector that

triggered $250 billion worth of deals in 2023 has stretched into

this year, as companies look for opportunities to deploy their

cash hoard, boost reserves, and become cost-effective.

Earlier this month, Diamondback bought privately held rival

Endeavor Energy Resources in a $26 billion cash-and-stock deal,

making it the third-largest oil and gas producer in the Permian

Basin of West Texas and New Mexico.

The EPIC Crude transaction will ensure a "cost-effective

takeaway out of the basin for our expanded crude portfolio,"

Diamondback Chief Financial Officer Kaes Van't Hof said in a

statement.

CONTEXT

EPIC Crude is an 800-mile crude oil pipeline system that

connects the Delaware, Midland Basin, and Eagle Ford supply to

EPIC's 3.4 million barrel Robstown Terminal near Corpus Christi.

The pipeline system entered full service in April 2020.

BY THE NUMBERS

EPIC Crude has a capacity of 600,000 barrels per day (bpd),

which is expandable up to 1 million barrels per day, and about 7

million barrels of operational storage.

Diamondback said it is converting its existing commitment on

EPIC Crude into a larger volume commitment of 200,000 bpd to

accommodate additional crude barrels from its completed deal

with Endeavor Energy.