Phillips 66 sells stake in Texas pipeline to $865 million

Phillips 66 announced on Monday that it will sell its 25% stake of the Gulf Coast Express pipeline, located in Texas, to an ArcLight Capital Partners affiliate for $865 millions. This puts the U.S. refiner in a position to surpass its asset sale goal.

Phillips 66, despite a decline in refinery profits, has chosen to maintain stable payouts for investors by reducing costs and setting a target of $3 billion via non-core assets sales.

Before Monday's announcement, the company had already sold fuel stations, pipelines and a share in a joint venture retailing in Switzerland to raise $2.7billion. Mark Lashier, CEO of Phillips 66, said that the company would continue to rationalize and optimize its portfolio.

The company also predicted a decrease in the segment's expenditure on refining to $822 millions in 2025 compared to the $1.07 million it expected to spend in 2024.

According to the Energy Information Administration (EIA), U.S. refinery margins will stabilize in 2019. This is due to an increase in industrial demand, as well as refinery closures including Phillips 66’s Los Angeles plant.

The company's overall spending is expected to be $2.1billion next year, down from the $2.2billion it projected for 2024. (Reporting and editing by Krishna Chandra Eluri in Bengaluru, Sourasis BOSE in Bengaluru)

(source: Reuters)