Phillips 66 Acquiring NGL System In Southeast Louisiana from Chevron

Phillips 66 Partners LP (Houston) has reached an agreement to acquire a natural gas liquids logistics system in southeast Louisiana from Chevron (San Ramon, Calif.). The system includes about 500 miles of pipelines and a storage cavern connecting multiple fractionation facilities, refineries, and a petrochemical facility.

“We are committed to a growth strategy that includes dropdowns from our sponsor Phillips 66, organic projects, and third-party acquisitions,” said Tim Taylor, Phillips 66 Partners president. “This acquisition will expand the partnership’s NGL footprint into the Louisiana market. The assets are strategically located and connect offshore production, local refineries, and petrochemical facilities in south Louisiana while providing significant opportunities for fee-based growth.”

The acquisition includes the TENDS Pipeline System, an approximately 300-mile, bi-directional system connected to third-party fractionators and refineries, including the Phillips 66 Alliance Refinery and a petrochemical plant. The VP Pipeline/EP Pipeline includes about 200 miles of regulated line that carries raw NGLs from a third-party natural gas processing plant to pipeline and fractionation infrastructure. The Sorrento Cavern, located in Ascension Parish, is a salt dome storage with about 1.5 MMbbl of NGL capacity.

Phillips 66 expects earnings before interest, taxes, depreciation, and amortization from the acquired assets to be about $25 million in 2017. The acquisition will be financed with cash and borrowing under the partnership’s revolving credit facility. The transaction is expected to close in the fourth quarter of this year pending regulatory approvals.