MEC&F Expert Engineers : Phillips 66 spins off natural gas pipelines to an affiliate for $1 billion

Tuesday, February 17, 2015

Phillips 66 spins off natural gas pipelines to an affiliate for $1 billion

FEBRUARY 16, 2015
 
Houston-based Phillips 66 sold two natural gas pipeline systems to its affiliate, Phillips 66 Partners, Monday for $1.01 billion in cash and stock.

Phillips 66 Partners, a master limited partnership, will pay Phillips 66 $880 million in cash and 1.7 million new units, Fuel Fix said.

The agreement also includes $65 million in debt.

Phillips 66 Partners will acquire a one third stake in the Sand Hills and Southern Hills natural gas liquids pipeline system and nearly a 19.46 percent stake in the Oklahoma-based Explorer Pipeline.

The deal includes the 200,000 barrel per day Sand Hills natural gas liquid pipeline system that runs from the Permian Basin and Eagle Ford Shale to the Gulf Coast as well as the 175,000 bpd Southern Hills NGL system that runs from the Midcontinent area to the coast.

Phillips 66 Partnership will also acquire the 660,000 bpd Explorer refined products pipeline running from the Gulf Coast to the Midwest.

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 U.S.,” Phillips 66 Partners chairman and CEO Greg Garland said.