Acquisition will provide expansion opportunities in the Louisiana NGL
Phillips 66 Partners LP (NYSE: PSXP) (the “Partnership”) announced that
an agreement has been reached for it to acquire a natural gas liquids
(NGL) logistics system in southeast Louisiana currently owned by
Chevron. The system includes approximately 500 miles of pipelines and a
storage cavern connecting multiple fractionation facilities, refineries
and a petrochemical facility.
“We are committed to a growth strategy that includes dropdowns from our
sponsor Phillips 66, organic projects and third-party acquisitions,”
said Tim Taylor, Phillips 66 Partners president. “This acquisition will
expand the Partnership’s NGL footprint into the Louisiana market. The
assets are strategically located and connect offshore production, local
refineries and petrochemical facilities in south Louisiana while
providing significant opportunities for fee-based growth.”
The acquisition includes the following assets:
TENDS Pipeline System, an approximately 300-mile, bidirectional NGL
pipeline system connected to third-party fractionators, refineries --
including the Phillips 66 Alliance Refinery -- and a petrochemical
VP Pipeline / EP Pipeline, approximately 200 miles of regulated
pipelines that carry raw NGLs from a third-party natural gas
processing plant to pipeline and fractionation infrastructure.
Sorrento Cavern, a salt dome cavern with approximately 1.5 million
barrels of NGL storage capacity located in Ascension Parish.
The Partnership expects earnings before interest, taxes, depreciation
and amortization (EBITDA) from the acquired assets to be approximately
$25 million in 2017. The acquisition will be financed with cash and
borrowings under the Partnership’s revolving credit facility.
The transaction is expected to close in the fourth quarter of 2016
pending regulatory approvals.
About Phillips 66 Partners
Headquartered in Houston, Texas, Phillips 66 Partners is a
growth-oriented master limited partnership formed by Phillips 66 to own,
operate, develop and acquire primarily fee-based crude oil, refined
petroleum product and natural gas liquids pipelines and terminals and
other transportation and midstream assets.
This press release contains forward-looking statements as defined
under the federal securities laws, including projections, plans and
objectives. Although Phillips 66 Partners believes that expectations
reflected in such forward-looking statements are reasonable, no
assurance can be given that such expectations will prove to be correct.
In addition, these statements are subject to certain risks,
uncertainties and other assumptions that are difficult to predict and
may be beyond Phillips 66 Partners’ control. If one or more of these
risks or uncertainties materialize, or if underlying assumptions prove
incorrect, actual results may vary materially from what Phillips 66
Partners anticipated, estimated, projected or expected. The key risk
factors that may have a direct bearing on the forward-looking statements
are the accuracy of our assumptions used to estimate the benefits to be
realized from the acquisition, our ability to successfully complete the
acquisition and integrate the assets into our operations, and other
factors as described in the filings that Phillips 66 Partners makes with
the Securities and Exchange Commission. In light of these risks,
uncertainties and assumptions, the events described in the
forward-looking statements might not occur or might occur to a different
extent or at a different time than as described. All forward-looking
statements in this release are made as of the date hereof and Phillips
66 Partners undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
Use of Non-GAAP Financial Information -- This news release
includes forecasted EBITDA. This is a non-GAAP financial measure.
Forecasted EBITDA is based on the Partnership’s projections for the
acquired assets. Forecasted EBITDA is included to help facilitate
comparisons of operating performance of the Partnership with other
companies in our industry, as well as help facilitate an assessment of
our assets' projected ability to generate sufficient cash flow to make
distributions to our partners. Forecasted EBITDA is not presented as an
alternative to the nearest GAAP financial measure, net income, and
should not be considered in isolation or as a substitute for measures of
performance prepared in accordance with GAAP. We are unable to present a
reconciliation of forecasted EBITDA because certain elements of net
income, including interest, depreciation and taxes, are not
available. Together, these items generally result in EBITDA being
significantly greater than net income.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160825006415/en/
Source: Phillips 66 Partners LP