Phillips 66 Partners LP closed the drop-down deal with its parent company Phillips 66 Co., successfully acquiring a 25% interest in each of Dakota Access LLC and Energy Transfer Crude Oil Co. LLC, together known as the Bakken Pipeline.
Through the deal, Phillips 66 transferred its stake in the 1,926-mile, 520,000-barrel-per-day pipeline system to its master limited partnership. Bakken Pipeline carries crude from the Bakken and Three Forks production areas to hubs in Patoka, Ill., and Nederland, Texas, as well as Phillips 66's Beaumont terminal.
The drop-down also includes Phillips 66 Partners' acquisition of a 100% stake in Merey Sweeny LP, which owns a vacuum distillation unit with a capacity of 125,000 bbl/d and a delayed coker unit with a capacity of 70,000 bbl/d. Merey Sweeny processes heavy sour crude oil to produce liquid products and fuel-grade petroleum coke at Phillips 66's Sweeny refinery in Texas.
Upon closing, the consideration totaled about $1.65 billion, composed of $372 million in cash; the assumption of certain liabilities; 4,713,113 Phillips 66 Partners common units issued to Phillips 66 Project Development Inc.; and 292,665 general partner units issued to Phillips 66 Partners GP LLC to maintain its 2% general partner interest in Phillips 66 Partners, according to an Oct. 10 SEC filing.
Phillips 66 Partners also closed its private placement of preferred units and common units worth $1.03 billion to help pay for the transaction. The securities were sold to affiliates of Stonepeak Infrastructure Partners, Tortoise Capital Advisors LLC and First Reserve Corp.