Dive Brief:
- Phillips 66 has completed its previously announced acquisition of the public shares of fueling company DCP Midstream for $3.8 billion, according to a Thursday announcement.
- DCP’s assets will integrate into Phillips 66’s existing midstream business, which focuses on crude oil pipelines and terminals; products pipelines and terminals; and natural gas liquids (NGL).
- Phillips 66 — which had previously owned DCP through a joint venture with pipeline and energy firm Enbridge — now takes majority ownership of one of the largest midstream operators in the U.S. as it continues to balance traditional fuel with electric vehicle charging programs.
Dive Insight:
The majority purchase of DCP is Phillips 66’s first acquisition since it took a 16% stake in clean energy company Novonix, which makes battery technology to support clean energy, in 2021. That move foreshadowed Phillips 66’s future activity in the natural gas sector.
“We are delivering on our commitment to grow our NGL business,” President and CEO Mark Lashier, said back in January when Phillips 66 agreed to acquire DCP Midstream. “Our wellhead-to-market platform captures the full NGL value chain. As we continue integrating DCP Midstream, we are unlocking significant synergies and growth opportunities.”
The acquisition coincides with Phillips 66’s electrification initiative, which began late last year when the retailer installed its first ultrafast EV chargers at its flagship fuel station near its headquarters in Houston. The company has since revealed that it has more EV charging sites in various stages of development in the U.S.
Back in January, Phillips 66 said acquiring Denver-based DCP would help it generate an incremental $1 billion of adjusted EBITDA, as well as capture operational and commercial synergies of at least $300 million by integrating the businesses together. The transaction was unanimously approved by DCP’s board of directors and affiliates of Phillips 66.
