As the Trump Administration opens the door to renewed hydrocarbon pipeline construction, energy giant Phillips 66 announced its plan to acquire EPIC Y-Grade GP, LLC and EPIC Y-Grade, LP, which own long haul natural gas liquids pipelines, fractionation facilities, and distribution systems. The $2.2 billion all cash deal is subject regulatory clearance, which is now widely expected due to the change in political climate.
“The EPIC NGL business consists of two fractionators (170 MBD) near Corpus Christi, Texas, approximately 350-miles of purity distribution pipelines and an approximately 885-mile NGL pipeline (175 MBD) linking production supplies in the Delaware, Midland and Eagle Ford basins to such fractionation complexes and to the Phillips 66 Sweeny Hub,” according to the deal’s press release. “The facilities connect Permian production to Gulf Coast refiners, petrochemical companies, and export markets and will be highly integrated with the Phillips 66 asset base.”
Energy Commodity Price Index Worldwide
Source: Statista
On his first day in office, President Trump issued an executive order allowing the Keystone XL oil pipeline to proceed once again. The multibillion-dollar project seeks to build a 1,200-mile pipeline to move crude oil from Canada’s oil sands into the United States for processing. The order rescinded former President Biden’s first day order revoking the permits that Trump has issued during his first Administration. The move may prove largely symbolic at present because the state permits along the route have since expired and portions of the pipeline dismantled. Rather than start over, the pipeline developer South Bow Corp. has expressed a desire to abandon the project.
Source: Pipeline & Gas Journal
Whether Keystone XL is resurrected or not, the move signals that the next 4 years will be friendlier to fossil fuels and the energy industry generally. President Trump faults the Biden Administration for increased energy prices as well as broad spread inflation as costs for transporting goods are pass along to consumers. “The previous administration has embedded deeply unpopular, inflationary, illegal, and radical practices within every agency and office of the Federal Government,” Trump explained as he issued his first round of executive orders. “Climate extremism has exploded inflation and overburdened businesses with regulation.”
According to DealPulse’s M&A database, which harnesses both AI and attorneys to digest the granular deal points of publicly announced transactions, Phillips 66 is advised Wachtell, Lipton, Rosen & Katz, while EPIC Y-Grade GP, LLC and EPIC Y-Grade, LP are advised by Kirkland & Ellis LLP.
