Phillips 66, Spectra to contribute assets, cash to DCP Midstream

Phillips 66 and Spectra Energy have entered into a nonbinding letter of intent for contributing assets to strengthen their 50-50 joint venture DCP Midstream.

Spectra plans to contribute its ownership interest in both the Sand Hills and Southern Hills natural gas liquids pipelines. Phillips 66 plans to contribute $1.5 billion in cash, which is expected to be used to pay down a portion of the DCP revolving credit facility.

The companies say the transaction is expected to provide DCP with a stronger balance sheet and increased financial flexibility, and positions the JV to grow through commodity price cycles. DCP hopes to convert certain contracts from commodity price sensitive to fee-based.

The deal is expected to close in the fourth quarter, after which Phillips 66 and Spectra will remain 50-50 joint venture owners of DCP.

Earlier this year, Phillips 66 Partners LP acquired one-third equity interest in the limited liability companies that respectively own the Sand Hills and Southern Hills systems from Phillips 66 as part of a $1.01-billion deal (OGJ Online, Feb. 16, 2015).

Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now


Making DDoS Mitigation Part of Your Incident Response Plan: Critical Steps and Best Practices

Like a new virulent strain of flu, the impact of a distributed denial of service (DDoS) attack is...

The Multi-Tax Challenge of Managing Excise Tax and Sales Tax

To be able to accurately calculate multiple tax types, companies must be prepared to continually ...

Operational Analytics in the Power Industry

Cloud computing, smart grids, and other technologies are changing transmission and distribution. ...

Maximizing Operational Excellence

In a recent survey conducted by PennEnergy Research, 70% of surveyed energy industry professional...