Phillips 66 Expands with Recent Acquisitions

Phillips 66 announced that it has entered into a definitive agreement to acquire EPIC Y-Grade GP, LLC and EPIC Y-Grade, LP, which owns various subsidiaries and long-haul natural gas liquids pipelines, fractionation facilities and distribution systems (EPIC NGL), for total cash consideration of $2.2 billion, subject to customary purchase price adjustments. The transaction is expected to be immediately accretive to earnings per share upon closing.

"This transaction solidifies Phillips 66's position as a leading downstream integrated energy provider," said Mark Lashier, Chairman and CEO of Phillips 66. "This transaction optimizes our Permian NGL value chain and enables Phillips 66 to provide producers with comprehensive flow assurance covering fractionation facilities near Corpus Christi, Sweeny and Mont Bellevue, Texas, and is expected to generate attractive returns in excess of our hurdle rate."

The EPIC NGL business includes two fractionators (170 MBD) located near Corpus Christi, Texas, approximately 350 miles of purity distribution pipelines and an approximately 885-mile NGL pipeline (175 MBD) connecting production supply from the Delaware, Midland and Eagle Ford basins to these fractionation complexes and the Phillips 66 Sweeny Hub. EPIC NGL is in the process of increasing its pipeline capacity to 225 MBD and has approved a second expansion to increase capacity to 350 MBD. Phillips 66 does not anticipate increasing its recently announced 2025 capital program associated with this expansion. EPIC NGL has also identified a third fractionation facility that would increase its fractionation capacity to 280 MBD. These facilities connect Permian production to Gulf Coast refineries, petrochemical companies and export markets and will be highly integrated with the Phillips 66 asset base.