Phillips 66 Partners Acquires Interest in Liberty Pipeline
February 21 2020 - 8:30AM
Business Wire
Phillips 66 Partners LP (NYSE: PSXP) (“Phillips 66 Partners” or
the “Partnership”) has reached agreement with Phillips 66 (NYSE:
PSX) to acquire its 50% interest in the Liberty Pipeline project
for approximately $75 million. Phillips 66 Partners plans to fund
the transaction through a combination of cash on hand and the
revolving credit facility. The transaction is expected to close on
March 2, 2020, with an effective date of March 1, 2020.
“The Liberty Pipeline is a great addition to the Phillips 66
Partners portfolio,” said Greg Garland, Phillips 66 Partners’
chairman and CEO. “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.”
The 24-inch Liberty Pipeline will provide crude oil
transportation service from the Rockies and Bakken production areas
to Cushing, Oklahoma. The pipeline is underpinned with long-term
volume commitments. Service on the pipeline is targeted to commence
in the first half of 2021. The cost of the pipeline is expected to
be approximately $1.6 billion, on a gross basis, or $800 million
net to the Partnership.
The purchase price to be paid by the Partnership reflects the
reimbursement of project costs incurred by Phillips 66 prior to the
effective date of the transaction. The terms of the transaction
were approved by the board of directors of the general partner of
Phillips 66 Partners, based on the approval and recommendation of
its conflicts committee comprised solely of independent directors.
The conflicts committee engaged Evercore to act as its financial
advisor and Vinson & Elkins, L.L.P. to act as its legal
counsel.
About Phillips 66 Partners
Headquartered in Houston, Phillips 66 Partners is a
growth-oriented master limited partnership formed by Phillips 66 to
own, operate, develop and acquire primarily fee-based crude oil,
refined petroleum products and natural gas liquids pipelines,
terminals and other midstream assets. For more information, visit
www.phillips66partners.com.
CAUTIONARY STATEMENTS
This news release contains certain forward-looking statements as
defined under the federal securities laws. Words and phrases such
as “is anticipated,” “is estimated,” “is expected,” “is planned,”
“is scheduled,” “is targeted,” “believes,” “continues,” “intends,”
“will,” “would,” “objectives,” “goals,” “projects,” “efforts,”
“strategies” and similar expressions are used to identify such
forward-looking statements. However, the absence of these words
does not mean that a statement is not forward-looking. Although
Phillips 66 Partners believes that expectations reflected in such
forward-looking statements are reasonable, no assurance can be
given that such expectations will prove to be correct. In addition,
these statements are subject to certain risks, uncertainties and
other assumptions that are difficult to predict and may be beyond
Phillips 66 Partners’ control. If one or more of these risks or
uncertainties materialize, or if underlying assumptions prove
incorrect, actual results may vary materially from what Phillips 66
Partners anticipated, estimated, projected or expected. The key
risk factors that may have a direct bearing on the forward-looking
statements are the accuracy of our assumptions used to estimate the
benefits to be realized from the acquisition, our ability to
successfully execute the pipeline project, and other factors as
described in the filings that Phillips 66 Partners makes with the
Securities and Exchange Commission. In light of these risks,
uncertainties and assumptions, the events described in the
forward-looking statements might not occur or might occur to a
different extent or at a different time than as described. All
forward-looking statements in this release are made as of the date
hereof and Phillips 66 Partners undertakes no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200221005063/en/
Jeff Dietert (investors) 832-765-2297 jeff.dietert@p66.com
Brent Shaw (investors) 832-765-2297 Brent.D.Shaw@p66.com
Dennis Nuss (media) 855-841-2368 dennis.h.nuss@p66.com
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