Phillips 66 is exploring the sale of its 25% stake in the Rockies Express Pipeline (REX), with expectations that the deal could fetch more than $1bn, including debt, reported Reuters, citing sources.
The REX pipeline, a 2,730 km interstate natural gas conduit, runs from Wyoming and Colorado to eastern Ohio.
The Houston-based oil refiner, valued at $67bn, is working with advisers to engage with potential buyers including private equity firms and infrastructure funds, the sources said.
It is aiming to secure a premium over the REX stake’s book value of $451m. Prospective buyers would also need to take on debt obligations exceeding $500m.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataA spokesperson for Phillips 66 declined to comment on the matter.
See Also:
Phillips 66 has set a target to raise approximately $3bn from asset sales within the current year.
In an interview with the publication, Phillips 66 CEO Mark Lashier said that while the company is in talks with potential buyers for asset sales, there is no urgency to finalise the divestments.
However, he refrained from specifying which assets were under discussion.
Recently, Phillips 66 has faced pressure from activist investor Elliott Management, which has been advocating for improvements in refining operations and changes to the board of directors.
Following negotiations, Phillips 66 and Elliott Management agreed to appoint a new board member endorsed by the investment firm and to collaborate on selecting a second director.
The remaining share of the REX pipeline is held by Tallgrass Energy, a privately owned entity.
Financial investors find pipeline stakes appealing due to their potential for stable cash flow.
Such stakes are seldom offered to buyers, making this a notable opportunity in the infrastructure investment landscape.
In January 2023, Phillips 66 agreed to purchase all publicly held common units of pipeline operator DCP Midstream in an all-cash transaction valued at $3.8bn.
