Philips 66 to divest assets

US energy company Philips 66 reached an agreement on Tuesday to sell 30 midstream logistics assets worth USD 1.3 billion to the master limited partnership it formed for the purpose, Phillips 66 Partners.

This is the largest such deal to date, and includes pipelines and terminals supporting Philips 66’s refineries in New Jersey, Montana, Texas and Oklahoma.

The deal, which Reuters reported is expected to be closed this month, includes a 10-year terminaling and throughput clause with minimum commitments covering some 85% of the forecasted volumes.

“As our largest dropdown acquisition to date, this represents a milestone for the partnership and will provide additional fee-based income and diversity to our already-strong midstream portfolio,” said Greg Garland, the chairman and CEO of Phillips 66 Partners in a press release. “We remain committed to maintaining a stable, fee-based, growing business model at Phillips 66 Partners, and are on track to deliver on our commitment to a five-year distribution compound annual growth rate of 30% through 2018.”