Phillips 66 Partners to buy pipeline systems’ interests for $1 billion
Phillips 66 Partners LP has reached agreement with Phillips 66 to acquire Phillips 66’s interests in three pipeline systems for a total of $1.01 billion.
The acquisition includes one-third equity interests in the limited liability companies that respectively own the Sand Hills and Southern Hills natural gas liquids pipeline systems; and 19.46% equity interest in Explorer Pipeline Co., the owner of the Explorer refined products pipeline system.
Phillips 66 will receive $880 million in cash and 1,726,914 newly issued PSXP units, to be allocated between common units and general partner units in a proportion allowing the general partner to maintain its 2% general partner interest.
The deal is expected to close in early March.
“This acquisition will expand our fee-based portfolio into NGL transportation and provide us with an interest in one of the largest refined products pipeline systems in the US,” commented Greg Garland, Phillips 66 Partners chairman and chief executive officer.
Sand Hills is a 720-mile, 200,000-b/d NGL pipeline system that provides takeaway service from DCP Midstream and third-party plants in the Permian basin and the Eagle Ford shale to fractionation facilities along the Texas Gulf Coast and the Mont Belvieu, Tex., market hub (OGJ Online, Oct. 25, 2012).
The system is expandable up to 350,000 b/d with additional pumping stations.
Southern Hills is an 800-mile, 175,000-b/d NGL pipeline system that provides takeaway service from DCP Midstream and third-party plants in the Midcontinent to fractionation facilities along the Texas Gulf Coast and the Mont Belvieu market hub (OGJ Online, June 13, 2011).
Explorer is a 1,830-mile, of 660,000-b/d refined products pipeline system that provides connectivity to refineries and market centers from the Gulf Coast to the Midwest.
Explorer Pipeline Co. in 2009 agreed to pay $3.3 million to resolve federal pollution charges stemming from a 2007 jet fuel spill in Texas (OGJ Online, Jan. 16, 2009).