Phillips 66 Partners LP (Phillips 66 Partners or the Partnership) has reached an agreement with Phillips 66 to acquire its 50% interest in the Liberty Pipeline project for approximately US$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 2 March 2020, with an effective date of 1 March 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 in. 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 US$1.6 billion, on a gross basis, or US$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.
Read the article online at: https://www.worldpipelines.com/business-news/24022020/phillips-66-partners-acquires-interest-in-liberty-pipeline/