The dropdown from Phillips 66, which is targeted to occur March 1, 2014, is expected to be immediately accretive to the earnings and distributable cash flow of the partnership.
"We are pleased to announce our first acquisition since the partnership’s initial public offering last July," said Greg Garland, Phillips 66 Partners chairman and CEO. "The size and quality of this acquisition shows the commitment of Phillips 66 to grow and enhance the partnership’s portfolio. Additionally, this transaction will position Phillips 66 Partners to deliver on its strategic plans of achieving top-quartile distribution growth."
The assets to be acquired include Gold Line System, consisting of a 681-mile refined products pipeline system that runs from the Phillips 66 operated refinery in Borger, Texas, to Cahokia, with access to the Phillips 66 refinery in Ponca City, as well as two parallel 54-mile lateral lines from Paola to Kansas City.
The system has a maximum throughput capacity of 132,000 barrels per day and includes four terminals respectively located at Wichita, Kansas City, Jefferson City, and Cahokia, with 172,000 barrels per day of aggregate throughput capacity and 4.3 million barrels of storage capacity.
The Medford Spheres, located in Medford, , with a total working capacity of 70,000 barrels and scheduled to commence operation March 1, providing an outlet for delivery of refinery-grade propylene from the Phillips 66 refinery in Ponca City, through interconnections with third-party pipelines, to Mont Belvieu, Texas.
In connection with the closing, Phillips 66 and the partnership will enter into transportation, storage and terminaling agreements that include minimum throughput volume commitments, with terms ranging from 5 to 10 years.
