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The American refiner Phillips 66
PSX.N said on Monday it will acquire various pipelines and distribution systems from Ares-backed pipeline operator EPIC NGL in an all-cash deal worth $2.2 billion. , as it seeks to strengthen its bet on natural gas liquids.
NGLs comprise a group of hydrocarbons extracted from natural gas in a processing plant and are used as feedstock in petrochemical plants, for heating, cooking and various other applications.
Phillips 66 is expected to acquire EPIC Y-Grade GP and EPIC Y-Grade, as well as its various subsidiaries, which is expected to have an immediate positive effect on earnings per share, the company said in its press release.
Phillips 66 has bet big on NGLs, having previously said it expected NGL production to grow faster than crude oil by the end of the decade, supported by demand from product manufacturers. petrochemicals.
“This transaction optimizes our NGL value chain in the Permian, enables Phillips 66 to provide producers with a comprehensive flow guarantee and is expected to generate attractive returns above our benchmark rates,” said Mark Lashier, Phillips Managing Director 66.
The company added that it does not plan to increase its investment program for 2025 after the operation, due to the process of increasing the capacity of EPIC NGL’s pipelines.
About 85% of U.S. NGL production is centered in the Permian Basin oil field and the majority of that is exported, according to RBN Energy analysts.
Last year, the oil refiner acquired Pinnacle Midland from private equity firm Energy Spectrum CapitalEnergy Spectrum Capital in a $550 million cash deal, to expand its presence in gathering and natural gas processing in the Permian Basin.
The U.S. shale industry has seen a record wave of deals lately as energy companies race to increase their oil and gas inventories, particularly in the Permian Basin.
