Phillips 66 boosts natural gas capabilities via EPIC NGL acquisition
The deal involves two fractionators located in Texas and a NGL pipeline that connects production supplies to the company’s Sweeny Hub.
Phillips 66 is set to buy EPIC Y-Grade GP and EPIC Y-Grade which own various subsidiaries and long haul natural gas liquids pipelines, fractionation facilities and distribution systems.
The EPIC NGL business consists of two fractionators (170 MBD) near Corpus Christi, Texas, approximately 350 miles of purity distribution pipelines and an approximately 885-mile NGL pipeline (175 MBD). These assets connect production supplies in the Delaware, Midland and Eagle Ford basins to such fractionation complexes and to the Phillips 66 Sweeny Hub.
EPIC NGL is in the process of increasing its pipeline capacity to 225 MBD and has sanctioned a second expansion to increase capacity to 350 MBD, which will not impact its buyer’s 2025 capital program.
“This transaction bolsters Phillips 66’s position as a leading integrated downstream energy provider. This transaction optimizes our Permian NGL value chain, allows Phillips 66 to provide producers with comprehensive flow assurance, reaching fractionation facilities near Corpus Christi, Sweeny, and Mont Belvieu, Texas, and is expected to deliver attractive returns in excess of our hurdle rates,” said said Mark Lashier, chairman and CEO of Phillips 66.
EPIC NGL has also identified a third fractionation facility that could bring its fractionation capacity up to 280 MBD. The facilities connect Permian production to Gulf Coast refiners, petrochemical companies, and export markets and will be highly integrated with the Phillips 66 asset base.
The transaction involves total cash consideration of $2.2 billion and is still subject to customary purchase price adjustments.
