Phillips 66 has significantly strengthened its foothold in the natural gas liquids (NGL) market with the acquisition of EPIC Y-Grade GP, LLC and EPIC Y-Grade, LP (collectively, "EPIC NGL") for a total cash consideration of $2.2 billion. This strategic move positions Phillips 66 as an even more prominent player in the downstream energy sector.

EPIC NGL brings a substantial portfolio of assets to Phillips 66, including two fractionation facilities with a combined capacity of 170 million barrels per day (MBD) near Corpus Christi, Texas. These facilities are complemented by an extensive network of pipelines, encompassing approximately 350 miles of purity distribution pipelines and an 885-mile NGL pipeline that connects key production basins like the Delaware, Midland, and Eagle Ford to the fractionation complexes and the Phillips 66 Sweeny Hub.

This acquisition is expected to have a positive impact on Phillips 66's earnings per share. Mark Lashier, chairman and CEO of Phillips 66, emphasized the strategic significance of this deal, stating that it optimizes the company's Permian NGL value chain and provides producers with enhanced flow assurance. By expanding its reach to fractionation facilities near Corpus Christi, Sweeny, and Mont Belvieu, Texas, Phillips 66 aims to deliver attractive returns that exceed its internal hurdle rates.

EPIC NGL is currently undergoing expansion, with plans to increase its pipeline capacity to 225 MBD and a sanctioned second expansion targeting a capacity of 350 MBD. While Phillips 66 does not anticipate increasing its recently announced 2025 capital program due to this expansion, EPIC NGL has identified the potential for a third fractionation facility, which could further boost its fractionation capacity to 280 MBD.

The integration of EPIC NGL's assets with Phillips 66's existing infrastructure will create significant synergies. The facilities will connect Permian production to crucial markets, including Gulf Coast refiners, petrochemical companies, and export destinations.

The transaction is subject to customary closing conditions, including the necessary regulatory approvals. Upon completion, this acquisition is expected to solidify Phillips 66's position as a leading integrated downstream energy provider, enhancing its ability to navigate the evolving energy landscape and capitalize on growth opportunities in the NGL market.

Phillips 66  is a prominent integrated energy company specializing in manufacturing, transporting, and marketing products essential to the global economy. Its diverse portfolio spans Midstream, Chemicals, Refining, Marketing and Specialties, and Renewable Fuels. Headquartered in Houston, the company is supported by a global workforce dedicated to delivering energy safely and reliably, enhancing lives, and advancing toward a lower-carbon future.