UPDATE 1-Energy Transfer acquires Lotus Midstream, raises 2023 earnings outlook

(Adds details during earnings conference call)

By Stephanie Kelly

NEW YORK, May 2 (Reuters) - U.S. midstream company Energy Transfer said on Tuesday it has completed its $1.45 billion acquisition of Lotus Midstream Operations and boosted its earnings expectations for the rest of the year.

The acquisition of Lotus Midstream Operations adds about 3,000 miles (4,800 km) of crude oil gathering and transportation pipelines, extending from southeast New Mexico across the Permian Basin of West Texas to Cushing, Oklahoma, it said.

Energy Transfer is now working to integrate operations and assets, including construction of a 30-mile pipeline and terminal optimization project to enhance connectivity within the Permian Basin and provide a direct link between Midland and Cushing.

Given the acquisition as well as increasing energy demand, Energy Transfer raised its adjusted EBITDA expectations for 2023 to between $13.05 billion and $13.45 billion, versus $12.9 billion to $13.3 billion previously, it said.

The company now expects its 2023 growth capital expenditures to be approximately $2 billion.

Adjusted EBITDA for the first quarter was $3.43 billion, up from $3.34 billion in the same quarter in 2022.

During the first quarter, Energy Transfer's volumes increased across all segments from a year earlier.

Natural gas liquids (NGL) transportation volumes were up 13% to a company record, it said. Midstream gathered volumes also reached a company record, gaining 14%.

Interstate natural gas transportation volumes rose 11% to a company record.

Energy Transfer exported record NGL volumes out of the Nederland Terminal and record ethane volumes out of the Marcus Hook Terminal in the first quarter.

The company has reached a final investment decision on a 250,000 barrel-per-day expansion to NGL export capacity at its Nederland Terminal, co-Chief Executive Thomas Long said during a conference call to discuss earnings on Tuesday. Energy Transfer projects the project to cost approximately $1.25 billion and expects the expansion to be in service in mid-2025.

Long added that Energy Transfer expects to file an appeal after the U.S. Department of Energy last month denied a request to extend a deadline to complete construction on the company's Lake Charles LNG facility project.

The DOE cited a lack of progress for the project, said co-Chief Executive Marshall McCrea.

The company completed during the quarter an optimization project on Oasis Pipeline, adding natural gas takeaway capacity out of the Permian Basin. (Reporting by Stephanie Kelly Editing by Marguerita Choy and David Gregorio)