Phillips 66 Partners has agreed to acquire Phillips 66’s 50% stake in the Liberty Pipeline project, US, in a deal worth $75m.

The project is a 24in-diameter, 700-mile-long pipeline deigned to transport crude oil from the Rockies and Bakken production areas to Cushing, Oklahoma. It is scheduled to commence operations in the first half of next year.

Liberty Pipeline project estimated to cost $1.6bn

Being constructed by a 50:50 joint venture (JV) between Phillips 66 and liquids pipeline operator Bridger Pipeline, the project is expected to cost $1.6bn on a gross basis or $800m net to the partnership.

Phillips 66 Partners is planning to fund the stake acquisition in the pipeline through a combination of the revolving credit facility and available hand. The transaction is planned to be closed on 02 March 2020.

Phillips 66 Partners chairman and CEO Greg Garland said: “The Liberty Pipeline is a great addition to the Phillips 66 Partners portfolio.

“It is a strong organic project and continues our strategy of growing PSXP with stable fee-based cash flows, supported by long-term volume commitments.

“Phillips 66 Partners is well positioned to execute this pipeline project on the heels of successfully starting up the Gray Oak Pipeline.

“We remain committed to maintaining a strong financial position and disciplined capital allocation, investing in projects with attractive returns and delivering growing distributions to unitholders.”

Phillips 66 Partners said that the project is supported by long-term volume commitments.

On behalf of the joint venture, Phillips 66 is responsible for project construction and operation.

The new pipeline is expected to use existing pipeline and utility corridors and advanced construction techniques wherever feasible in a bid to reduce environmental and community impact.