As part of a deal to merge their joint ventures, Phillips 66 (NYSE:PSX) and Enbridge Inc. (TSE:ENB) exchanged stakes in two significant US pipelines.
According to a statement from the crude refiner, Phillips 66 boosted its holding of DCP Midstream LP to 43.3% from 28.3% while decreasing its share in Gray Oak Pipeline LLC to 6.5% from 42.3%. Enbridge will receive $400 million in cash from the corporation as part of the deal.
Enbridge’s holding in Gray Oak will rise from 22.8% to 58.5%, while its stake in DCP would decrease from 28.3% to 13.2%, according to the Calgary-based business. The pipeline will be run by Enbridge beginning in the second quarter of 2023. Phillips 66 is now in charge of running it.
Separately, Phillips 66 declared that it has made a non-binding offer to purchase all publicly owned common units of DCP Midstream, a master limited partnership, for $34.75 apiece. This indicates that Phillips 66 may invest around $3.1 billion in the purchase. As of 9:34 a.m., DCP units were up 9.8% to $38.16, suggesting optimism about the proposal’s improvement.
Shares of Enbridge rose 0.9% while those of Phillips 66 sank 2.4%.
Through the restructuring, Phillips 66 hopes to increase its presence in natural gas liquids, a vital feedstock for refineries and petrochemical facilities. Enbridge can now concentrate on transporting crude oil from the Permian area to the Gulf Coast thanks to the agreement.
Currently, two distinct joint ventures between Phillips 66 and Enbridge each control a portion of DCP and Gray Oak; both joint ventures will soon be combined into one. On Wednesday, the deal was made and then sealed.
The deal was made on August 17, 2022, and it was finalized on that date. Its sole financial advisor was BofA Securities, Inc. Phillips 66 was represented by Bracewell LLP as its legal counsel and by Gibson Dunn & Crutcher LLP as its special tax counsel. Refer to the Strategic Joint Venture Update on the Phillips 66 Investors website at phillips66.com/investors for more details on this transaction.
Phillips 66
The company manufactures, ships, and sells goods that power the world economy. The portfolio of the diversified energy corporation includes enterprises in the midstream, chemicals, refining, marketing, and specialty sectors. An energy company with headquarters in Houston, employs people all around the world who are dedicated to improving lives and supplying energy in a safe, dependable manner while achieving a future with fewer carbon emissions.
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Author Jowi Kwasu 
