Tuesday , September 19 2017
Home / Midstream / Gathering & Processing / Phillips 66 Partners Acquires Standish Pipeline, Remaining Interest

Phillips 66 Partners Acquires Standish Pipeline, Remaining Interest

Phillips 66 Partners LP (PSXP) reached an agreement with Phillips 66 (PSX) to acquire the Standish Pipeline and the remaining 75% interest in Phillips 66 Sweeny Frac LLC for $775 million total consideration, the company said May 4.

Sweeny Frac LLC owns the newly constructed Sweeny Fractionator One and Clemens Caverns storage facility.

PSXP previously acquired a 25% interest in Sweeny Frac LLC in March; the company said this acquisition will be funded through a combination of newly issued PSXP units to PSX and the assumption of notes payable to PSX. The acquisition is expected to close later in May, and will be immediately accretive to PSXP and its unitholders.

The transaction includes the following assets:

–Sweeny Fractionator One: A 100,000 barrel per day (bbl/d) NGL fractionator in the Phillips 66 Sweeny Refinery complex in Old Ocean, Texas;

–Clemens Caverns storage facility, which is about 15 miles southeast of the Sweeny Refinery. It includes five newly developed caverns that will have storage capacity of about 7.5 MMbbl of Y-grade NGL, propane and butane, with the capability for future capacity expansion; and

–The Standish Pipeline: A refined petroleum products pipeline system extending from PSX’s Ponca City Refinery in Ponca City, Okla., to the PSXP’s North Wichita Terminal in Wichita, Kan.

Both companies are parties to fractionation and storage agreements, each with a 10-year term, that include a minimum fractionation volume commitment for Sweeny Fractionator One and minimum storage commitments at the Clemens Caverns storage facility.

The total consideration of $775 million is based on forecast annual EBITDA of about $90 million, which is attributable to the assets and interest acquired in the transaction, and $13 million of remaining growth capex expected to be incurred by PSXP for additional Clemens Caverns development.

Greg Garland, chairman and CEO of PSXP, said that adding the Standish Pipeline is consistent with the company’s plan to build out the current systems that are strategically integrated with Phillips 66 refineries. The company remains on track to deliver the stated five-year compound annual distribution growth target of 30% through the end of 2018, Garland added.

The terms of the transaction were approved by the board of directors of the general partner of PSXP, based on the approval and recommendation of its conflicts committee comprised solely of independent directors. Evercore was the conflicts committee’s financial adviser and Vinson & Elkins LLP was its legal counsel.

Phillips 66 Partners LP is based in Houston.

Check Also

first-energy

1,615 MW of Power Generation assets to be sold by FirstEnergy in United States

FirstEnergy Corp. announced that it has entered into a revised agreement for the sale of ...

Leave a Reply

Your email address will not be published. Required fields are marked *