Houston-based Phillips 66 Partners LP (NYSE: PSXP) has agreed to acquire an NGL logistics system in southeast Louisiana from Chevron Corp. (NYSE: CVX). The system includes approximately 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 following assets:
- TENDS Pipeline System, an approximately 300-mile, bidirectional NGL pipeline system connected to third-party fractionators, refineries—including the Phillips 66 Alliance Refinery—and a petrochemical plant.
- VP Pipeline/EP Pipeline, approximately 200 miles of regulated pipelines that carry raw NGL from a third-party natural gas processing plant to pipeline and fractionation infrastructure.
- Sorrento Cavern, a salt dome cavern with approximately 1.5 million barrels of NGL storage capacity located in Ascension Parish.
Phillips 66 expects EBITDA from the acquired assets to be approximately $25 million in 2017. The acquisition will be financed with cash and borrowings under Phillips’ revolving credit facility.
The transaction is expected to close in fourth-quarter 2016 pending regulatory approvals.
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