Midstream

Phillips 66 Partners Takes 50% Interest in $1.6-Billion Liberty Pipeline Project

The transaction is expected to close in March. The Liberty Pipeline runs 700 miles between Cushing, Oklahoma and Guernsey, Wyoming.

Map of Liberty pipeline project
Map of 700 mil-long Liberty Pipeline
Liberty Pipeline

Phillips 66 Partners LP said it has reached agreement with Phillips 66 to acquire its 50% interest in the Liberty Pipeline project for approximately $75 million. Phillips 66 Partners added that it plans to fund the transaction through a combination of cash on hand and the revolving credit facility. The transaction is expected to close on 2 March, with an effective date of 1 March.

Phillips 66 Partners is a growth-oriented master limited partnership formed by Phillips 66 to own, operate, develop, and acquire primarily fee-based crude oil; refined petroleum products; and natural gas liquids pipelines, terminals, and other midstream assets.

Phillips 66 announced in June 2019 with Bridger Pipeline LLC the formation of a 50/50 joint venture, Liberty Pipeline LLC, and were proceeding with construction of the Liberty Pipeline. The 24-in. pipeline will provide crude oil transportation service from the Rockies and Bakken production areas to Cushing, Oklahoma. The pipeline is underpinned with long-term volume commitments.

Service on the pipeline is targeted to commence in the first half of 2021. The cost of the pipeline is expected to be approximately $1.6 billion, on a gross basis, or $800 million net to Phillips 66 Partners.

“The Liberty Pipeline is a great addition to the Phillips 66 Partners portfolio,” said Greg Garland, Phillips 66 Partners’ chairman and CEO. “It is a strong organic project and continues our strategy of growing PSXP with stable fee-based cash flows, supported by long-term volume commitments.”

Garland added that Phillips 66 Partners is well positioned to execute this pipeline project on the heels of successfully starting up the Gray Oak Pipeline.