(Steve Stewart, Energy Analytics Institute, 16.Dec.2024) — Phillips 66 entered into a definitive agreement to divest DCP GCX Pipeline LLC, which owns a 25% non-operated equity interest in Gulf Coast Express Pipeline LLC, to an affiliate of ArcLight Capital Partners, LLC for pre-tax total cash proceeds of $865mn, subject to purchase price adjustments.
The sale is expected to close in Jan. 2025, Phillips 66 announced 16 Dec. 2024 in an official statement.
Gulf Coast Express Pipeline is an approximately 500-mile pipeline system that transports about 2 billion cubic feet per day (Bcf/d) of natural gas from the Permian Basin to the Agua Dulce, Texas area.
Following the transaction, Gulf Coast Express, will be jointly owned by subsidiaries of Kinder Morgan, Inc. and affiliates of ArcLight Capital.
The sales price represents an implied Enterprise Value/EBITDA multiple of 10.6x based on expected 2025 EBITDA. Proceeds from the sale will support the strategic priorities of Phillips 66, including returns to shareholders and debt reduction, the company said.
“With this transaction, we have exceeded our $3bn asset divestiture target established in our strategic priorities. We intend to continue to optimize the portfolio and rationalize non-core assets going forward,” Phillips 66 chairman and CEO Mark Lashier said in the statement.
“The evolution of our portfolio underscores our position as a leading integrated downstream energy provider, enhancing shareholder value and positioning the company for the future,” Lashier said.
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By Steve Stewart reporting from Baton Rouge. © 2024 Energy Analytics Institute (EAI). All Rights Reserved.
