Chevron To Sell NGL Logistics Assets To Phillips 66 Partners
Zacks Investment Research | Aug 28, 2016 10:07PM ET
Leading integrated energy player,Chevron Corporation (NYSE:CVX) , has entered into an agreement to sell its natural gas liquids (NGL) logistics system in southeast Louisiana to Phillips 66 (NYSE:PSX) Partners LP (NYSE:PSXP) . The logistics system consists of approximately 500 miles of pipelines and a storage space that connects multiple fractionation facilities, refineries and a petrochemical facility.
The deal is expected to be completed in the fourth quarter of 2016, subject to certain regulatory approvals. Though terms of the transaction remain undisclosed, Phillips 66 Partners announced plans to finance the acquisition with cash and borrowings under its revolving credit facility.
With the acquisition, Phillips 66 Partners will gain access to an approximately 300-mile TENDS pipeline system – a bidirectional NGL pipeline system connected to third-party fractionators and refineries. In addition to this, the partnership will gain access to a nearly 200-miles of regulated pipelines that transport raw liquids from a third-party natural gas processing plant to pipeline and fractionation infrastructure. Moreover, the deal includes acquirement of Sorrento Cavern, a salt dome cavern which is located in Ascension Parish and has a NGL storage capacity of nearly 1.5 million barrels.
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