Phillips 66 Partners announced this week that it will acquire Phillip 66's equity interest in the Sand Hills and Southern Hills natural gas liquids (NGL) pipeline systems as well as in the Explorer Pipeline Company refined products pipeline system. Phillips 66 will receive in return a total consideration of $1.01 billion consisting of $880 million in cash and 1,726,914 newly issued PSXP units.
Specifically, the Sand Hills and Southern Hills NGL pipelines systems total some 1520 miles of pipeline which provide a takeaway service from DCP Midstream and third-party plants to fractionation facilities on the Texas Gulf Coast and the Mont Belvieu market hub in Texas. Both systems collectively have the capacity of nearly 1,000,000 bpd.
The Explorer Pipeline is a lengthy 1,830 mile refined products pipeline system, which connects the refineries and market centers from the Gulf Coast to the Midwest. This system has a capacity of 660,000 barrels per day.
“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.,” said Greg Garland, Phillips 66 Partners chairman and CEO. “Our addition of these diversified assets demonstrates our commitment to providing strong growth for our unitholders.”