Phillips 66 has signed an agreement to divest 30 crude, refined products and natural gas liquids (NGL) logistics assets to its master-limited partnership, Phillips 66 Partners, for $1.3bn.
The Phillips 66’s assets considered for sale supports its Bayway, Billings, Borger and Ponca City refineries.
Texas-based Phillips 66 Partners is the master limited partnership formed by Phillips 66 to own, operate, develop and acquire midstream assets.
The transaction, which subject to satisfaction of customary closing conditions, is scheduled to be completed by the end of this month.
Phillips 66 Partners chairman and CEO Greg Garland said: “As our largest dropdown acquisition to date, this represents a milestone for the Partnership and will provide additional fee-based income and diversity to our already strong midstream portfolio.
“We remain committed to maintaining a stable, fee-based, growing business model at Phillips 66 Partners, and are on track to deliver on our commitment to a five-year distribution compound annual growth rate of 30% through 2018.”
As per the deal, Phillips 66 will sell a crude pipeline and terminal system as well as refined products and NGL pipeline and terminal system that serve Phillips 66’s Ponca City refinery.
Additional assets considered for sale include a crude pipeline and terminal system as well as a refined products pipeline and terminal system that serve Phillips 66’s Billings refinery.
The sale also includes a refined products and NGL terminal system that provides storage services for Phillips 66’s Bayway refinery as well as a crude pipeline and terminal system that serves the Phillips 66-operated Borger refinery.
Phillips 66 will also sign a 10-year terminaling and throughput agreements which includes minimum volume commitments covering about 85% of estimated volumes, the company said.