Phillips 66 to Buy Pinnacle Midland for $550M
Phillips 66 agreed to acquire Pinnacle Midland Parent LLC for $550 million in cash from private equity firm Energy Spectrum Capital, as part of efforts to expand its midstream operations in the Permian basin.
The Midland basin in Texas, in the Permian shale, is the nation’s biggest oil and second biggest gas producing basin.
Expected to be completed by the middle of the year, the transaction would give Houston, TX-based Phillips 66 the recently built Dos Picos natural gas gathering and processing system. The plant has a processing capacity of 220 million cubic feet per day (MMcfpd), while the gathering pipeline stretches 80 miles.
“Pinnacle is a bolt-on asset that advances our wellhead-to-market strategy and complements our diversified and integrated asset portfolio,” Mark Lashier, chairman and CEO of Phillips 66, said.
In March, Phillips 66 was reportedly considering the sale of its 25% stake in the Rockies Express Pipeline (REX), a deal that could exceed $1 billion. The REX pipeline, spanning 2,730 kilometers, connects natural gas supplies from Wyoming and Colorado to markets in eastern Ohio.
In January 2023, Phillips 66 agreed to purchase all publicly held common units of DCP Midstream for $3.8 billion in cash.