Phillips 66 announced on Monday that it will sell its 25% stake in the Gulf Coast Express pipeline in Texas to an affiliate of ArcLight Capital Partners for $865 million. This move is part of the U.S. refiner’s strategy to exceed its asset sale target amid declining refining profits.
Key Highlights:
Asset Sale Strategy:
Despite a downturn in refining profits, Phillips 66 aims to maintain stable payouts to investors by cutting costs and targeting $3 billion in divestitures through non-core asset sales.
Prior to this announcement, the company had already raised $2.7 billion by selling fuel terminals, pipelines, and a stake in a retail joint venture in Switzerland.
CEO’s Statement:
Phillips 66 CEO Mark Lashier stated, “We intend to continue to optimize the portfolio and rationalize non-core assets going forward.”
Financial Outlook:
The company forecasts a reduction in refining segment expenditure to $822 million in 2025, down from an expected $1.07 billion for 2024.
Overall expenditure for the company is projected to be $2.1 billion next year, slightly lower than the $2.2 billion estimated for 2024.
Market Expectations:
The U.S. refining margins are anticipated to stabilize in the coming year, supported by increased industrial demand and recent refinery closures, including Phillips 66’s facility in the Los Angeles area.