Pipeline operator Energy Transfer Partners LP said it will buy Sunoco Inc for $5.3 billion in stock and cash to get into the more lucrative crude oil transportation business as natural gas prices stay weak.

Oil and gas production from shale formations in the United States has surged over the past two years, creating a scramble to build infrastructure to get supplies to refining hubs.

The resulting oversupply has sent natural gas prices to their lowest in a decade and made drilling in so-called "dry gas" fields uneconomical.

"As we have said in the past year, our goal is to derive more of our distributable cash flow from the transportation of heavier hydrocarbons like crude oil, NGLs (natural-gas liquids), and refined products," Energy Transfer Chief Executive Kelcy Warren said in a statement.

Sunoco shareholders will receive $25 in cash and 0.5245 Energy Transfer units, or $50.13, for every share they own.

The offer represents a 22.5 percent premium to Sunoco's Friday close of $40.91 on the New York Stock Exchange.

Sunoco, which was once a major independent refiner in the Northeastern United States, plans to end nearly 120 years in the U.S. refining business as high crude prices and slumping demand squeeze profits.

Sunoco, which plans to get out of the refining business, said it will continue talks with private equity firm Carlyle Group LP  for a joint venture to run its 335,000-barrel-per-day Philadelphia refinery.

A deal with Carlyle would save the refinery, the biggest on the U.S. East Coast, from a planned closure and ease concerns about potential fuel shortage on the East Coast this summer.

Energy Transfer said the Sunoco deal would immediately add to its distributable cash flow and change the cash flow mix of its pipeline businesses to about 70 percent natural gas and 30 percent liquids.

The planned acquisition of Sunoco comes close on the heels of a deal by Energy Transfer Equity LP , the owner of the general partner of Energy Transfer Partners, to buy rival Southern Union Co for about $5.5 billion, after a heated bidding war with Williams Cos Inc .

Energy Transfer said it would also gain incentive distribution rights in Sunoco Logistics Partners , Sunoco's 32.4 percent interest in Sunoco Logistics Partners' limited partner units and Sunoco's branded retail business.

In addition to its gasoline stations, Sunoco's logistics business owns refined product and oil pipelines as well as terminals.

Wells Fargo Securities acted as financial adviser to Energy Transfer, while Credit Suisse Securities LLC advised Sunoco.