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Phillips 66 enhances NGL platform

Published by , Editorial Assistant
World Pipelines,

Phillips 66 has announced a realignment of its economic and governance interests in DCP Midstream, LP (DCP Midstream) Gray Oak Pipeline, LLC (Gray Oak Pipeline) through the merger of existing joint ventures owned with Enbridge Inc. (Enbridge).

Phillips 66 increased its economic interest in DCP Midstream from 28.26% to 43.31% and will oversee and manage the joint venture’s interest in DCP Midstream, including the General Partner. Phillips 66’s economic interest in Gray Oak Pipeline decreased from 42.25% to 6.50%. Enbridge will oversee and manage the joint venture’s interest in Gray Oak Pipeline. As part of the transaction, Phillips 66 contributed approximately US$400 million of cash. The transaction is expected to be accretive to earnings.

“We are growing our integrated NGL business to further strengthen our competitive position, while driving operational and commercial synergies,” said Mark Lashier, President and CEO of Phillips 66. “DCP is a valued business in our portfolio and enhances our existing value chain from wellhead to market, creating a platform for future NGL growth. Our focus remains on operating excellence and disciplined capital allocation to create sustainable value for our shareholders.”

DCP Midstream is a master limited partnership with a diversified portfolio of assets, engaged in the business of gathering, processing, transporting, storing and marketing natural gas, as well as transporting, fractionating and marketing NGLs. Phillips 66 and Enbridge hold their DCP Midstream general and limited partner interests through DCP Midstream, LLC.

Gray Oak Holdings, LLC, a Joint Venture (JV) between Phillips 66 and Enbridge, has been merged with and into DCP Midstream, LLC. The JV continues to own 65% of the Gray Oak Pipeline crude oil system with capacity of 900 000 bpd of crude oil from the Permian and Eagle Ford basins in West Texas to the US Gulf Coast.

The transaction was entered into and closed on 17 August 2022. BofA Securities, Inc. acted as exclusive financial advisor to Phillips 66. Bracewell LLP acted as legal counsel, and Gibson Dunn & Crutcher LLP acted as special tax counsel to Phillips 66.

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US pipeline news Crude oil pipeline news Natural gas pipeline news