Phillips 66 announced it has agreed to acquire Pinnacle Midland Parent LLC (Pinnacle) from private equity firm Energy Spectrum Capital for cash consideration of $550 million in a strategic move to expand its natural gas gathering and processing footprint in the Midland Basin.
“We are growing our Midstream business in the Permian to further strengthen and expand our service offerings to customers while driving operational and commercial synergies,” said Mark Lashier, Chairman and CEO of Phillips 66. “Pinnacle is a bolt-on asset that advances our wellhead-to-market strategy and complements our diversified and integrated asset portfolio. Further, this transaction aligns with our long-term objectives to build out our natural gas liquids value chain, be disciplined with our capital allocation and create sustainable value for our shareholders.”
Pinnacle’s assets include the recently built Dos Picos natural gas gathering and processing system: a 220 MMcf/d gas processing plant, 80 miles of gathering pipeline and 50,000 dedicated acres through high-quality producers in one of Phillips 66’s focus basins. The Dos Picos processing complex and related infrastructure is easily scalable toward a second 220 MMcf/d gas plant and integrates well into Phillip 66’s existing downstream infrastructure.
“Pinnacle has established itself as one of the premier midstream providers in the Midland Basin, with a top-notch talented team, first-class operations and infrastructure, and world-class customers,” said J. Greg Sargent, CEO of Pinnacle. “I am incredibly proud of what we have achieved as a team in the basin and in the community.”
