Phillips 66 Partners has signed an agreement to acquire Phillips 66’s 50% stake in the Liberty Pipeline project, US, for $75m.
The project is a 24in-diameter, 700-mile-long pipeline that transports crude oil from the Rockies and Bakken production areas to Cushing, Oklahoma.
The project is a 50:50 joint venture (JV) between Phillips 66 and Bridger Pipeline. Initial service on the pipeline is targeted to commence in the first half of next year.
According to Phillips 66 Partners, the project is underpinned with long-term volume commitments.
The company intends to finance the transaction through a combination of cash on hand and its revolving credit facility.
Phillips 66 Partners chairman and CEO Greg Garland said: “The Liberty Pipeline is a great addition to the Phillips 66 Partners portfolio.
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By GlobalData“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 project is expected to cost $1.6bn on a gross basis or $800m net to the partnership.
The transaction is scheduled for completion on 2 March.
