Phillips 66 has entered into a definitive agreement to acquire EPIC Y-Grade GP, LLC and EPIC Y-Grade, LP, collectively known as EPIC NGL, for $2.2 billion in cash, subject to customary purchase price adjustments. The acquisition includes long-haul natural gas liquids pipelines, fractionation facilities, and distribution systems. The transaction is expected to close following regulatory approvals and other standard conditions, and it is anticipated to be immediately accretive to Phillips 66’s earnings per share upon completion.
“This transaction bolsters Phillips 66’s position as a leading integrated downstream energy provider,” said Mark Lashier, chairman and CEO of Phillips 66. “It optimizes our Permian NGL value chain, enhances flow assurance for producers, and connects critical production areas to fractionation and export facilities along the Gulf Coast. This acquisition is expected to deliver returns exceeding our hurdle rates.”
EPIC NGL Business Overview
The EPIC NGL portfolio includes two fractionators with a combined capacity of 170,000 barrels per day near Corpus Christi, Texas, approximately 350 miles of purity product pipelines, and an 885-mile NGL pipeline with a current capacity of 175 MBD. The pipeline links production from the Delaware, Midland, and Eagle Ford basins to fractionation facilities and export hubs, including Phillips 66’s Sweeny Hub.
EPIC NGL is actively expanding its pipeline capacity to 225 MBD, with a second phase already sanctioned to increase capacity to 350 MBD. Additionally, a third fractionation facility has been identified, which could boost overall fractionation capacity to 280 MBD. These assets integrate seamlessly with Phillips 66’s existing infrastructure, enhancing connectivity between Permian production and Gulf Coast refiners, petrochemical markets, and global export destinations.
Phillips 66 has stated that the acquisition will not impact its previously announced 2025 capital program.
Strategic Impact
This acquisition strengthens Phillips 66’s position in the downstream energy sector by expanding its NGL infrastructure and value chain capabilities. The transaction is expected to generate attractive returns while providing producers with comprehensive flow assurance and access to critical Gulf Coast markets.
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