Phillips 66 has 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 (NGL) pipelines, fractionation facilities, and distribution systems (EPIC NGL) for US$2.2 billion.
The EPIC NGL business consists of two fractionators (170 million barrels per day [MBD]) near Corpus Christi, Texas, approximately 350 miles (563 km) of purity distribution pipelines and an approximately 885-mile (1424-km) NGL pipeline (175 MBD) linking 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. The facilities connect Permian production to Gulf Coast refiners, petrochemical companies, and export markets and will be integrated with the Phillips 66 asset base.
“This transaction bolsters Phillips 66’s position as a leading integrated downstream energy provider,” said Mark Lashier, chair and chief executive officer of Phillips 66. “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.”
