Phillips 66 completes $2.2 billion EPIC NGL acquisition

HOUSTON - Phillips 66 (NYSE:PSX), a major player in the downstream energy sector with a market capitalization of $50.77 billion and annual revenue of $143.15 billion, has finalized its acquisition of EPIC Y-Grade GP, LLC and EPIC Y-Grade, LP, as well as their subsidiaries, which include extensive natural gas liquids (NGL) pipelines, fractionation facilities, and distribution systems, collectively known as EPIC NGL. The deal, valued at approximately $2.2 billion, was paid in cash. According to InvestingPro data, the company maintains a healthy free cash flow yield of 5%, supporting its strategic expansion initiatives.

Don Baldridge, the executive vice president of Midstream & Chemicals at Phillips 66, highlighted the transaction’s strategic importance, stating it "strengthens our position as a leading integrated downstream energy provider" and "enhances our ability to provide seamless and efficient delivery of energy products." He emphasized the expected benefits to producers and shareholders, including "unparalleled flow assurance" and the creation of "long-term value."

The acquired assets consist of two fractionators in Corpus Christi, Texas, with a combined capacity of 170 million barrels per day (MBD), around 350 miles of purity distribution pipelines, and an approximately 885-mile NGL pipeline with a capacity of 175 MBD. This pipeline connects production from the Delaware, Midland, and Eagle Ford basins to fractionation complexes and the Phillips 66 Sweeny Hub.

Phillips 66 also announced plans to expand the NGL pipeline’s capacity from 175 MBD to 225 MBD by the second quarter of this year, with a further increase to 350 MBD expected by the fourth quarter of 2026.

The acquisition is designed to enhance the integration of Permian production with Gulf Coast refineries, petrochemical companies, and export markets, and aligns closely with Phillips 66’s existing asset base.

Phillips 66 is headquartered in Houston and operates a diversified global portfolio that encompasses Midstream, Chemicals, Refining, Marketing and Specialties, and Renewable Fuels businesses. The company is committed to providing energy while pursuing a lower-carbon future.

This news release contains forward-looking statements regarding the anticipated benefits of the acquisition and future expansion projects, which involve risks and uncertainties. Actual results may vary due to factors such as market conditions, regulatory changes, and environmental considerations. InvestingPro analysis suggests Phillips 66 is currently trading below its Fair Value, with a Financial Health Score of 2.31 (FAIR). For detailed insights and exclusive ProTips about Phillips 66’s valuation and growth prospects, access the comprehensive Pro Research Report, available among 1,400+ top US stocks on InvestingPro.

The information in this article is based on a press release statement from Phillips 66.

In other recent news, Phillips 66 has been at the center of a significant boardroom dispute involving Elliott Investment Management. The energy company filed preliminary proxy materials with the U.S. Securities and Exchange Commission for its 2025 Annual Meeting, proposing new board nominees and seeking shareholder approval to declassify the board. This comes amid Elliott’s legal action against Phillips 66, demanding the contestation of four board seats at the upcoming meeting, following the company’s decision to reduce its board size from 14 to 12 members. Elliott, managing over $2.5 billion in Phillips 66, has nominated seven directors, emphasizing their expertise in refining and corporate governance. The firm argues that these changes are necessary to unlock the company’s full potential. In response, Phillips 66 has advised shareholders to support its board’s nominees and recommendations, labeling Elliott’s proposals as distractions. The company has highlighted its achievements in shareholder returns and strategic progress, including returning $13.6 billion to shareholders and reducing refining costs. As tensions continue, Phillips 66 remains open to engaging with Elliott to find a mutually beneficial path forward.

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