Phillips 66 Partners LP (PSXP) said it has reached an agreement to acquire natural gas liquids (NGL) assets in southeast Louisiana — including approximately 500 miles of pipelines, a storage cavern and other facilities — from Chevron Corp.

In a statement Thursday, the Houston-based partnership said it will acquire the TENDS Pipeline System, an approximately 300-mile, bi-directional NGL pipeline system connected to third-party fractionators, a petrochemical plant and refineries, including the Phillips 66 Alliance Refinery.

PSXP will acquire VP Pipeline/EP Pipeline, a regulated pipeline system measuring about 200 miles that carries raw NGLs from a third-party natural gas processing plant to pipeline and fractionation infrastructure. The partnership will also acquire the Sorrento Cavern, a salt dome cavern located in Ascension Parish, LA, with approximately 1.5 million bbl of NGL storage capacity.

Financial terms of the transaction were not disclosed. PSXP said it expects earnings before interest, taxes, depreciation and amortization from the acquired assets to total approximately $25 million in 2017. The partnership said the acquisition will be financed with cash and borrowings under its revolving credit facility.

“We are committed to a growth strategy that includes dropdowns from our sponsor Phillips 66, organic projects and third-party acquisitions,” said PSXP President Tim Taylor. “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 transaction is expected to close in 4Q2016, pending regulatory approvals.

PSXP acquired a one-third equity interest in two NGL pipelines from its general partner, Phillips 66 (PSX), early last year (see Shale Daily, Feb. 17, 2015).

The Sand Hills pipeline system measures 1,110 miles, includes a 720-mile mainline (250,000 b/d current capacity, expandable to 350,000 b/d), and transports NGLs from the Permian Basin and the Eagle Ford Shale. Meanwhile, the Southern Hills system is 940 miles long, includes an 800-mile mainline (175,000 b/d capacity) and transports NGLs from the Midcontinent. Both bring NGLs to Gulf Coast markets and a hub in Mont Belvieu, TX. Both systems are operated by DCP Midstream LLC (DCP) and entered service in June 2013 (see Shale Daily, June 18, 2013).

Last October, PSX said it would contribute $1.5 billion in cash to help DCP weather the low commodity price environment (see Daily GPI, Oct. 22, 2015). DCP is a 50-50 joint venture of Spectra Energy Corp. and PSX (see Daily GPI, March 8, 2007).