Pipeline companies Sunoco Logistics Partners LP and Energy Transfer Partners (ETP), both of which are controlled by general partner Energy Transfer Equity LP, said on Monday they would combine in a corporate consolidation to cut borrowing and operating costs.

ETP is the main company behind the controversial $3.7 billion US Dakota Access Pipeline, which has been delayed since September, when federal regulators decided to re-review permitting for the project to cross land owned by the federal government.

The companies said they expect the combined company's greater scale and diversity to strengthen its balance sheet and projected that the deal will create more than $200 million US in yearly commercial cost savings by 2019.

Still, units of both companies fell on Monday. Sunoco Logistics closed down almost nine per cent to $24.47 US, while ETP's units dropped more than seven per cent to $36.52 US.

ETE units, meanwhile, gained 3.6 per cent to end at $17.92 US.

Sunoco Logistics will buy Energy Transfer Partners in an all-stock deal valued at $19.93 billion US, creating the second-largest master limited partnership by enterprise value.

ETP shareholders will get 1.5 Sunoco units for each ETP unit they own. As of Friday's close, that was about $39.29 US per unit, a slight discount to what ETP units were worth.

Energy Transfer Equity walked away from its more than $20 billion US takeover of Williams Cos. Inc. earlier this year after months of lawsuits and heated arguments between the rival pipeline companies.