US energy company Phillips 66 has entered a definitive agreement to acquire EPIC Y-Grade GP and EPIC Y-Grade for a total cash consideration of $2.2bn.
The two entities hold subsidiaries, pipelines, fractionation facilities and distribution systems, collectively known as EPIC NGL.
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This move is expected to immediately enhance the company’s earnings per share upon completion.
The EPIC NGL assets include two fractionators with a combined capacity of 170,000bpd located near Corpus Christi, Texas, roughly 350 miles of purity distribution pipelines and an 885-mile NGL pipeline with a current capacity of 175,000bpd.
This pipeline network connects production from the Delaware, Midland and Eagle Ford basins to the fractionation sites and Phillips 66’s Sweeny Hub.
EPIC NGL is boosting its pipeline capacity to 225,000bpd and has plans for a further expansion to 350,000bpd.
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By GlobalDataPhillips 66 chairman and CEO Mark Lashier said: “This transaction bolsters Phillips 66’s position as a leading integrated downstream energy provider.
“This transaction optimises 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.”
Phillips 66 has confirmed that it does not plan to increase its 2025 capital programme due to this expansion.
Additionally, EPIC NGL is exploring the addition of a third fractionation facility, potentially increasing total capacity to 280,000bpd.
These facilities are crucial in linking Permian Basin production to Gulf Coast refiners, petrochemical companies and export markets, and will integrate seamlessly with Phillips 66’s existing assets.
The acquisition is subject to standard closing conditions including the necessary regulatory approvals.
In a separate legal matter, a California state court jury ordered Phillips 66 to pay $604.9m in damages to Propel Fuels in October 2024. The energy company has been found liable for misappropriating Propel’s trade secrets to enhance its renewable fuel capabilities.
