The transaction, which marks the largest ever till date for Phillips 66 Partners, will have the pipeline and natural gas firm gaining an interest in the Bakken Pipeline, also known as the Dakota Access Pipeline (DAPL).
Under the terms, Phillips 66 Partners will acquire 25% stake each in Dakota Access Energy Transfer Crude Oil Company.
The Bakken Pipeline comprises 3100km of combined pipelines with a capacity of 520,000 barrels per day of crude oil capacity.
As part of the transaction, Phillips 66 Partners will also buy 100% stake in Merey Sweeny (MSLP), a Phillips 66 subsidiary.
MSLP owns the fuel-grade coke processing units at the Sweeny Refinery in Old Ocean, Texas. In this regard, Phillips 66 Partners will ink a new 15-year tolling agreement that would have a base throughput fee and minimum volume commitment from Phillips 66.
The Sweeny Refinery produces gasoline, diesel and aviation fuels along with other products.
Phillips 66 Partners chairman and CEO Greg Garland said: “The Bakken Pipeline complements our strategy to expand current systems that are integrated with Phillips 66 refineries and terminals, while MSLP provides another reliable source of cash flow generation to the portfolio.
“This acquisition supports our EBITDA growth objective by adding solid fee-based assets to the Partnership and keeps us on track to deliver our 30 percent distribution growth target.”
The transaction is expected to be completed early October.
Last year, Phillips 66 Partners acquired 30 crude, refined products and natural gas liquids (NGL) logistics assets from Phillips 66 for $1.3bn.
Image: Phillips 66 Partners will acquire stake in the Bakken Pipeline. Photo: courtesy of supakitmod/Freedigitalphotos.net.
