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Every Step of the Way - Phillips 66's NGL Network from the DJ, Permian and Eagle Ford to the Coast

Phillips 66 is probably best known for its fleet of complex refineries, but the Houston-based company also is involved in marketing, chemicals and midstream services. In fact, P66 is one of only a handful of midstreamers offering the full range of “well-to-market” or “well-to-water” NGL services — everything from associated-gas gathering systems and gas processing to NGL pipelines, storage, fractionators and export facilities. And P66’s standing among NGL midstream providers has only been enhanced by the recent doubling of its ownership interest in DCP Midstream. In today’s RBN blog, we continue our series on major NGL networks with a look at P66’s NGL-related assets, most of which run from the Rockies, West Texas and South Texas to the NGL hubs in Mont Belvieu and Old Ocean, TX. 

This blog series is about the select group of U.S. midstream companies that own and operate entire, A-to-Z NGL networks that take NGLs from the wellhead to either their ultimate domestic consumer — petrochemical plants, refineries, wholesale markets, etc. — or to waterside terminals that load purity products (in P66’s case, propane and butane, aka LPG) onto ships for transport overseas. In Part 1, we looked at Energy Transfer’s NGL-linked assets in Texas and in Part 2 we shifted our focus to the company’s network in the Northeast. Next up was Targa Resources — in Part 3 we looked at the company’s gas gathering and processing assets, Grand Prix NGL pipeline system, fractionators in Mont Belvieu, and the Galena Park LPG export terminal. Most recently, in Part 4 and Part 5, we examined the expansive range of NGL assets owned and operated by Enterprise Products Partners.

Unlike the other companies with NGL networks, P66 is also a major refiner, with full ownership of eight refineries in the U.S. (and half stakes in two others) as well as full ownership of a refinery in the U.K. and a 19% stake in a refinery in Germany. (P66’s net refining capacity tops 1.9 MMb/d.) But folks in the NGL business also know the company as a major player in that segment. Before we dive into P66’s NGL-related assets, we should note that the company in two transactions (one in August 2022 and the other in June 2023) increased its economic interests in DCP Midstream — a major NGL midstream company in its own right — from 28.26% to 86.8%. In the first deal, P66 increased its stake in DCP from 28.26% to 43.31% and assumed management of the midstream entity. In exchange, P66 gave Enbridge $400 million and a 35.75% interest in the Gray Oak Pipeline in Texas (leaving P66 with a 6.5% stake in that 900-Mb/d crude oil pipeline). In the second deal, P66 acquired all of the publicly held common units representing limited partner interests in DCP for about $3.8 billion, thereby increasing P66’s economic interest in the midstream entity to 86.8%. (Enbridge owns the remaining 13.2% stake in DCP.) Upon the closing of the second deal in June 2023, P66 said it expected the doubling of its interest in DCP in June to generate an incremental $1 billion in annual adjusted EBITDA and capture more than $400 million in commercial and operating synergies across its well-to-market NGL value chain by 2025. 

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