(Steve Stewart, Energy Analytics Institute, 6.Jan.2025) — Phillips 66 entered into a definitive agreement to buy EPIC Y-Grade GP, LLC and EPIC Y-Grade, LP, which own various subsidiaries and long haul natural gas liquids (NGLs) pipelines, fractionation facilities and distribution systems (EPIC NGL) for total cash consideration of $2.2bn, subject to customary purchase price adjustments.
Upon closing, the transaction is expected to be immediately accretive to Phillips 66’s earnings per share, the company said 6 Jan. 2025 in an official statement.
“This transaction bolsters Phillips 66’s position as a leading integrated downstream energy provider,” Phillips 66 chairman and CEO Mark Lashier said in the statement. “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.”
The EPIC NGL business consists of two fractionators (170,000 b/d) near Corpus Christi, Texas, approximately 350 miles of purity distribution pipelines and an approximately 885-mile NGL pipeline (175,000 b/d) linking production supplies in the Delaware, Midland and Eagle Ford basins to such fractionation complexes and to the Phillips 66 Sweeny Hub.
For its part, EPIC NGL is in the process of expanding its pipeline capacity to 225,000 b/d and has sanctioned a second expansion to boost capacity to 350,000 b/d.
EPIC NGL has also identified a third fractionation facility that could bring its fractionation capacity up to 280,000 b/d. 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.
As a result of the deal, Phillips 66 does not expect to increase its recently announced 2025 capital program. Additionally, the Phillips 66 transaction with EPIC NGL is subject to customary closing conditions, including required regulatory clearance.
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By Steve Stewart reporting from Baton Rouge. © 2025 Energy Analytics Institute (EAI). All Rights Reserved.
