Phillips 66: Strategic Sale for Portfolio Optimization

Phillips 66 has entered into a definitive agreement to sell the 25% non-operating equity interest in the Gulf Coast Express Pipeline held by DCP to a subsidiary of ArcLight Capital Partners. The agreed purchase price amounts to a total of $865 million before taxes, subject to price adjustments. With this transaction, Phillips 66 has exceeded its goal of divesting assets worth $3 billion. Mark Lashier, Chairman and CEO of the company, stated that this measure is a significant step towards streamlining the portfolio and focusing on core areas. This portfolio shift solidifies Phillips 66's role as a leading integrated provider in the downstream energy sector and enhances shareholder value. The Gulf Coast Express Pipeline is an approximately 800-kilometer long pipeline system that transports about two billion cubic feet of natural gas daily from the Permian Basin to the Agua Dulce area in Texas. After the sale, which is expected to be completed in January 2025, the pipeline will be jointly operated by Kinder Morgan and other ArcLight interests. The proceeds from the sale are intended to support strategic priorities such as shareholder returns and debt reduction, and represent an enterprise value/EBITDA multiple of 10.6 based on the EBITDA expectations for 2025.