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Phillips 66 Partners Spending $2.4B for Stakes in Bakken Shale Pipeline, Refinery System

Phillips 66 Partners LP (PSXP) is taking over a 25% stake in a Bakken Shale pipeline system and buying out a 100% interest in a refinery system owned by parent Phillips 66 in a deal valued at $2.4 billion.

In its largest acquisition to date, PSXP is acquiring a one-quarterinterest in Dakota Access LLC and Energy Transfer Crude Oil Co. LLC -- collectively, the Bakken Pipeline. It also would take over Merey Sweeny LP (MSLP), which owns fuel-grade code processing units at the Phillips 66 Sweeny Refinery.

The transactions, expected to be completed early next month, include $625 million in Bakken Pipeline debt and $100 million of MSLP debt.

“This is the largest acquisition PSXP has made to date,” said PSXP CEO Greg Garland. “The Bakken Pipeline complements our strategy to expand current systems that are integrated with Phillips 66 refineries and terminals, while MSLP provides another reliable source of cash flow generation to the portfolio.”

The Bakken Pipeline consists of 1,926 combined pipeline miles and 520,000 b/d of crude oil capacity expandable to 570,000 b/d. Receipt stations in North Dakota access Bakken and Three Forks production, a delivery and receipt point in Patoka, IL, and delivery points in Nederland, TX, including the Phillips 66 Beaumont Terminal.

MSLP facilities in Old Ocean, TX, include a 125,000 b/d capacity vacuum distillation unit and a 70,000 b/d capacity delayed coker unit.

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