Phillips 66 Partners to acquire stake in three US pipeline systems for $1.01bn
Phillips 66 Partners has signed an agreement to acquire Phillips 66’s interests in three pipeline systems for $1bn.
Under the terms of the agreement, Phillips 66 Partners will purchase one-third interests in the limited liability companies that respectively own the Sand Hills and Southern Hills natural gas liquids (NGL) pipeline systems based in Texas, US, and a 19.46% stake in Explorer Pipeline Company.
Explorer Pipeline Company operates a pipeline carrying refined products between the Gulf Coast and the Midwest in the US.
As part of the transaction, Phillips 66 will receive a total of $1.01bn which includes $880m in cash and 1.7m Phillips 66 Partners’ units.
Phillips 66 Partners chairman and CEO Greg Garland said: “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 U.S.
“Our addition of these diversified assets demonstrates our commitment to providing strong growth for our unitholders.”
Scheduled to be completed in early March 2015, the transaction will be immediately accretive to the Partnership and its unitholders.
The 720-mile Sand Hills NGL pipeline system has a capacity of 200,000 barrels per day and is expandable up to 350,000 barrels per day with additional pumping stations while the 800-mile Southern Hills NGL pipeline system has a capacity of 175,000 barrels per day.
The 660,000 barrels per day Explorer refined products pipeline system connects refineries and market centers from the Gulf Coast to the Midwest.
