Phillips 66 MLP to Bring in Up to $400 Million
Influx will “fund growth investments in transportation, midstream sectors”
HOUSTON -- Phillips 66 expects to raise up to $400 million through a master limited partnership (MLP) spinoff designed to support growth and investor value creation.
“We expect to use the master limited partnership as an efficient vehicle to fund growth investments in the transportation and midstream sectors,” said Phillips 66 chairman and CEO Greg Garland. “We believe the proposed MLP will enable us to enhance value for our shareholders and increase the transparency of our business.”
Phillips 66 intends to contribute a portion of its transportation assets to form an MLP, as reported in a Raymond James/CSP Daily News Flash yesterday. The company is evaluating assets for contribution to the MLP, which may include certain product and crude pipelines and terminals, rail cars and other rail infrastructure, as well as natural gas liquids (NGL) assets.
A registration statement for an initial public offering (IPO) is expected to be filed with the Securities and Exchange Commission in the second quarter of 2013. Subject to market conditions and final approval by Phillips 66’s board of directors, the company anticipates selling a minority interest in the MLP in an IPO in the second half of 2013. Phillips 66 expects the offering to raise approximately $300 million to $400 million of gross cash proceeds.
Based in Houston, Phillips 66 is a downstream energy company with refining and marketing, midstream and chemicals businesses. Phillips 66’s R&M operations include 15 refineries with a net crude oil capacity of 2.2 million barrels per day, 10,000 branded marketing outlets and 15,000 miles of pipeline systems. In midstream, the company primarily conducts operations through its 50% interest in DCP Midstream LLC, one of the largest natural-gas gatherers and processors in the United States, with 7.2 billion cubic feet per day of gross natural gas processing capacity.
See "Related Content" below to read more about how MLPs function and why more and more midstream companies are finding them advantageous.