Phillips 66 Partners LP (NYSE: PSXP) announced Feb. 13 that it will acquire $700 million in assets from Phillips 66.

The acquisition is the partnership's first since the Houston-based company went public in July 2013. The partnership was formed by Phillips 33 to own, operate, develop and acquire primarily fee-based crude oil, refined petroleum product and natural gas liquids pipelines and terminals and other transportation and midstream assets.

The purchase includes Phillips 66’s (PSX) Gold Product Pipeline System (Gold Line System) and the Medford Spheres, two newly constructed refinery-grade propylene storage spheres.

The Gold Line System consists of a 681-mile refined products pipeline system and two parallel 54-mile lateral lines. The system has a maximum throughput capacity of 132,000 barrels per day and includes four terminals with 172,000 barrels per day of throughput capacity and 4.3 million barrels of storage capacity.

The Medford Spheres have a total working capacity of 70,000 barrels and is scheduled to commence operation March 1.

In connection with the acquisition, Phillips 66 and the partnership will enter into transportation, storage and terminaling agreements that include minimum throughput volume commitments, with terms ranging from five to 10 years. The minimum volume commitments account for more than 80% of expected throughput volumes. The partnership expects these assets to contribute EBITDA of $65 million to $70 million in their first full year of operation. Annual maintenance capital expenditures are initially expected to be between $3 million to $4 million.

The partnership will finance the acquisition with $400 million cash on hand, the issuance of additional units valued at $140 million, and a $160 million, five-year note payable to a subsidiary of Phillips 66.