Phillips 66 has reached a definitive agreement to acquire EPIC Y-Grade GP, LLC and EPIC Y-Grade, LP, which own subsidiaries and natural gas liquids (NGL) pipelines, fractionation facilities and distribution systems, for $2.2 billion in cash, subject to customary purchase price adjustments. 

According to the company’s press release published on Monday, January 6, 2025, it expects the transaction to immediately increase earnings per share upon closing.  

“This transaction bolsters Phillips 66’s position as a leading integrated downstream energy provider,” said Mark Lashier, chairman and CEO of Phillips 66. 

He added that the acquisition optimises their Permian NGL value chain and allows the company to provide producers with “comprehensive flow assurance,” reaching fractionation facilities near Corpus Christi, Sweeny and Mont Belvieu, Texas. 

The EPIC NGL business includes two fractionators near Corpus Christi with a combined capacity of 170,000 barrels per day (BPD), about 350 miles of purity distribution pipelines and an approximately 885-mile NGL pipeline with a capacity of 175,000 BPD. 

The pipeline links production supplies in the Delaware, Midland and Eagle Ford basins to the fractionation complexes and the Phillips 66 Sweeny Hub.   

EPIC NGL is currently increasing its pipeline capacity to 225,000 BPD and has approved a second expansion to 350,000 BPD. However, Phillips 66 does not anticipate increasing its recently announced 2025 capital program due to the expansion. 

EPIC NGL has also identified a potential third fractionation facility that could increase its total fractionation capacity to 280,000 BPD. The facilities connect Permian production to Gulf Coast refiners, petrochemical companies and export markets and will be integrated with Phillips 66's existing assets.   

However, the transaction is subject to customary closing conditions, including regulatory clearance.