Phillips 66 (NYSE: PSX) has agreed to acquire Pinnacle Midland Parent LLC (Pinnacle) from private equity firm Energy Spectrum Capital for cash consideration of $550 million in a strategic move to expand its natural gas gathering and processing footprint in the Midland Basin.
“We are growing our Midstream business in the Permian to further strengthen and expand our service offerings to customers while driving operational and commercial synergies,” said Mark Lashier, Chairman and CEO of Phillips 66. “Pinnacle is a bolt-on asset that advances our wellhead-to-market strategy and complements our diversified and integrated asset portfolio. Further, this transaction aligns with our long-term objectives to build out our natural gas liquids value chain, be disciplined with our capital allocation and create sustainable value for our shareholders.”
Pinnacle’s assets include the recently built Dos Picos natural gas gathering and processing system: a 220 MMcf/d gas processing plant, 80 miles of gathering pipeline and 50,000 dedicated acres through high-quality producers in one of Phillips 66’s focus basins. The Dos Picos processing complex and related infrastructure is easily scalable toward a second 220 MMcf/d gas plant and integrates well into Phillip 66’s existing downstream infrastructure.
“Pinnacle has established itself as one of the premier midstream providers in the Midland Basin, with a top-notch talented team, first-class operations and infrastructure, and world-class customers,” said J. Greg Sargent, CEO of Pinnacle. “I am incredibly proud of what we have achieved as a team in the basin and in the community.”
The transaction is expected to close around mid-year of 2024 following satisfaction of customary closing conditions, including under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR).
About Phillips 66
Phillips 66 (NYSE: PSX) is a leading diversified and integrated downstream energy provider that manufactures, transports and markets products that drive the global economy. The company’s portfolio includes Midstream, Chemicals, Refining, and Marketing and Specialties businesses. Headquartered in Houston, Phillips 66 has employees around the globe who are committed to safely and reliably providing energy and improving lives while pursuing a lower-carbon future. For more information, visit phillips66.com.
About Pinnacle Midstream II LLC
Pinnacle Midstream II LLC is an independent midstream energy company headquartered in Houston, Texas. The company is focused on providing high-quality natural gas services to producer customers throughout the Midland Basin. For more information, please visit www.pinnaclemidstream.com.
About Energy Spectrum
Pinnacle Midstream II LLC is backed by Energy Spectrum Capital, a Dallas, Texas-based infrastructure firm that makes direct investments in well managed, lower-middle-market companies that acquire, develop, and operate energy assets in North America. For more information, please visit www.energyspectrum.com.
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