Phillips 66 buys EPIC NGL pipelines, distribution, fractionation

Phillips 66 Co. has agreed to buy EPIC Y-Grade GP LLC and EPIC Y-Grade LP, which own various subsidiaries and long-haul NGL pipelines, fractionation, and distribution systems (EPIC NGL) for $2.2 billion cash, subject to customary purchase price adjustments. Phillips 66 described the transaction as optimizing its Permian basin NGL value chain, connecting Permian production to Gulf Coast refiners, petrochemical companies, and export sites.

EPIC NGL consists of two fractionators (170,000-b/d total capacity) near Corpus Christi, Tex., about 350 miles of purity distribution pipelines and an 885-mile, 175,000-b/d NGL trunkline linking production in Delaware, Midland, and Eagle Ford basins to both the Corpus Christi complexes and the Phillips 66 Sweeny Hub. 

Phillips’ Sweeny hub, part of its refinery complex in Old Ocean, Tex., has total fractionation capacity of 550,000 b/d. The adjacent Sweeny refinery has 265,000 b/d of crude throughput capacity and can produce 158,000 b/d of gasoline and 125,000 b/d of distillates. 

EPIC NGL is in the process of increasing the trunkline’s capacity to 225,000 b/d and has sanctioned a second expansion to boost it to 350,000 b/d. EPIC NGL has also identified a third fractionation plant that could bump its total to 280,000 b/d. 

The transaction is subject to customary closing conditions, including required regulatory clearance.

Phillips 66 last year acquired Pinnacle Midland in a moved to expand its Midland basin natural gas gathering and processing footprint. Pinnacle’s assets included the recently built Dos Picos natural gas gathering and processing system: a 220-MMcfd gas processing plant, 80 miles of gathering pipeline, and 50,000 dedicated acres through high-quality producers in one of Phillips 66’s focus basins (OGJ Online, May 20, 2024).