Phillips 66 to sell interest in Gulf Coast Express natural gas pipeline system
Phillips 66 has agreed to sell DCP GCX Pipeline LLC, which owns a 25% non-operated equity interest in Gulf Coast Express Pipeline LLC, to an affiliate of ArcLight Capital Partners LLC for pre-tax total cash proceeds of $865 million.
The roughly 500-mile Gulf Coast Express Pipeline transports about 2 bcfd of natural gas from the Permian basin to the Agua Dulce, Tex., area. The mainline consists of roughly 82 miles of 36-in. OD pipeline and 365 miles of 42-in. pipeline starting at the Waha Hub near Coyanosa, Tex., in the Permian basin and ending near Agua Dulce, Tex. GCX’s Midland Lateral includes about 50 miles of 36-in. pipeline and associated compression, connecting with the GCX mainline.
Following the transaction, Gulf Coast Express Pipeline LLC will be jointly owned by subsidiaries of Kinder Morgan Inc. and affiliates of ArcLight Capital Partners LLC.
Targa Resources Corp. sold its shareholding in the pipeline for $857 million in 2022 (OGJ Online, Feb. 3, 2022).
In selling its interest in the pipeline system, Phillips 66 exceeds its $3 billion asset divestiture target, the company said in a release Dec. 16.
The sale is expected to close in January 2025.
Phillips 66's 2025 capital budget
The same day as the divestiture announcement, Phillips 66 noted its 2025 capital budget of $2.1 billion, including $998 million for sustaining capital and $1.1 billion for growth capital.
In Midstream, the capital budget of $975 million comprises $429 million for sustaining projects and $546 million for growth projects.
In Refining, Phillips 66 plans to invest $822 million, including $414 million for sustaining capital.
Phillips 66’s proportionate share of capital spending by joint ventures Chevron Phillips Chemical Company LLC (CPChem) and WRB Refining LP (WRB) is expected to total $877 million and be self-funded.
CPChem’s growth capital will continue to fund the construction of petrochemical infrastructure on the US Gulf Coast and in Ras Laffan, Qatar, through joint ventures. Start up is expected in 2026.
Including Phillips 66’s proportionate share of capital spending associated with joint ventures CPChem and WRB, the company’s total 2025 capital program is projected to be $3 billion.