Phillips 66 to Sell $865 Million Stake in 500-Mile Gulf Coast Express Pipeline to ArcLight
Phillips 66 announced an agreement to sell its 25% non-operated equity interest in the Gulf Coast Express Pipeline to an affiliate of ArcLight Capital Partners for $865 million in cash, subject to adjustments.
The 500-mile Gulf Coast Express Pipeline transports about 2 billion cubic feet of natural gas per day from the Permian Basin to the Agua Dulce area in Texas. After the transaction, the pipeline will be co-owned by subsidiaries of Kinder Morgan and affiliates of ArcLight Capital Partners.
The sale of DCP GCX Pipeline LLC, which owns the stake in Gulf Coast Express, will help Phillips 66 surpass its $3 billion asset divestiture target set as part of its strategic priorities.
“With this transaction, we have exceeded our $3 billion asset divestiture target established in our strategic priorities. We intend to continue to optimize the portfolio and rationalize non-core assets going forward,” said Mark Lashier, chairman and CEO of Phillips 66. “The evolution of our portfolio underscores our position as a leading integrated downstream energy provider, enhancing shareholder value and positioning the company for the future.”
Phillips 66 said the sale price reflects an enterprise value-to-EBITDA multiple of 10.6x based on expected 2025 EBITDA. Proceeds will be used to support the company’s strategic priorities, including shareholder returns and debt reduction.
The transaction is expected to close in January 2025.
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