On Jan 10th, 2025, Phillips 66 (“P66”) announced its acquisition of EPIC Y-Grade, further strengthening its position in the natural gas liquids (NGLs) market, particularly as it related to the prolific Permian basin. This move expands P66’s already impressive portfolio, which includes complete vertical integration of NGL assets such as gas processing, NGL pipelines, fractionation, storage, and export terminals. By acquiring EPIC’s NGL assets, P66 aims to maximize its Permian-to-Gulf Coast value chain, increase the reliability of flows from Permian processing plants to Gulf Coast fractionation, and position itself for significant NGL growth with Corpus Christi area fractionation and potential for large scale export. A “Mini-Mont Belvieu” outside of Mont Belvieu is taking shape. Acquisition of EPIC NGLs appears to be a realistic NGL growth avenue for P66.
Strategic Significance
Through this acquisition, Phillips 66 will take control of key EPIC assets, including:
- The EPIC Y-Grade NGL pipeline, with an existing capacity of 175 MBPD, an expansion underway that will add 50 MBPD, and another potential expansion of +125 MBPD (Note: EPIC trunkline has operating capacity of 300 MBPD. BANGL JV has 125 MBPD undivided joint ownership capacity, and EPIC has the remaining 175 capacity)
- EPIC 1 and Robstown fractionators, with a combined processing capacity of 170 MBPD and ability to add three 110 MBPD fractionation facilities at Corpus Christi.
- A y-grade pipeline connecting the Corpus Christi area fractionators to the Sweeny fractionator.
- Purity product distribution lines along the Gulf Coast (to Clemens and Exxon-Sabic cracker).
These assets will enhance Phillips 66’s midstream opportunities, reliability, and flexibility from production basin through fractionation and LPG (and potentially ethane) exports. With P66’s Freeport LPG export capacity maxed out and inability to break into the “Mont Belvieu Club”, EPIC provided the only viable growth opportunity to maximize their “wellhead to dock” NGL strategy and maintain/grow market share from Marathon/MPLX for “non-Mont Belvieu” NGL hubs.