ArcLight Capital Companions LLC stated Monday it had accomplished the acquisition of Phillips 66’s DCP GCX Pipeline LLC, which owns a 25 % non-operating stake within the Gulf Coast Specific Pipeline (GCX), for $865 million.
“Going ahead, GCX shall be collectively owned by subsidiaries of Kinder Morgan Inc. (NYSE: KMI) and ArcLight”, infrastructure investor ArcLight stated in a press launch. Houston, Texas-based Kinder Morgan stays as operator.
“GCX is a premier, 500-mile pure fuel pipeline with roughly 2 Bcf/d [billion cubic feet a day] of capability that’s underpinned by a high-quality array of shippers below long-term dedicated contracts”, Boston, Massachusetts-based ArcLight stated.
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“GCX supplies important residue fuel takeaway service from the Permian Basin to key U.S. Gulf Coast end-markets, together with key rising demand areas such because the rising liquefied pure fuel export market in South Texas”.
ArcLight founder Dan Revers stated, “Because the U.S. seeks to fulfill the quickly rising energy demand wants related to AI and knowledge middle infrastructure, we consider extra pure gas-related infrastructure, each energy and midstream property, shall be wanted to fulfill this goal”.
“This acquisition builds on our historical past courting again to 2001 of investing in important fuel infrastructure, potential to be a value-added companion, and expands our strategic partnership with Kinder Morgan”, Revers added.
Lucius Taylor, companion at ArcLight, commented, “As one of many largest, lowest price transmission property within the area, we consider GCX is nicely positioned to capitalize on the twin tailwinds of rising Permian manufacturing and long-term LNG, energy, and industrial demand development”.
Barclays Capital Inc. acted as ArcLight’s monetary advisor within the transaction, introduced December 16, 2024. Latham & Watkins LLP served as authorized counsel.
For downstream oil and fuel participant Phillips 66, the transaction was a part of a $3 billion divestment package deal to assist its shareholder return goal and different long-term priorities. The GCX sale exceeded the Houston-based firm’s divestment plan.
“We intend to proceed to optimize the portfolio and rationalize non-core property going ahead”, chief govt Mark Lashier stated December concerning the settlement with ArcLight. “The evolution of our portfolio underscores our place as a number one built-in downstream power supplier, enhancing shareholder worth and positioning the corporate for the longer term”.
Phillips 66 stated, “Proceeds from the sale will assist the strategic priorities of Phillips 66, together with returns to shareholders and debt discount”.
“The gross sales worth represents an implied Enterprise Worth/EBITDA a number of of 10.6x primarily based on anticipated 2025 EBITDA [earnings before interests, taxes, depreciation and amortization]”, it stated.
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