February 03, 2020 [Yahoo] –

Fourth Quarter

– Achieved record earnings of $255 million and adjusted EBITDA of $345 million
– Increased quarterly distribution to $0.875 per common unit
– Commenced initial operations on the Gray Oak Pipeline

Full-Year 2019

– Reported record earnings of $923 million and adjusted EBITDA of $1.3 billion
– Completed the Bayou Bridge pipeline extension, the Lake Charles isomerization unit and the Lake Charles pipeline projects
– Eliminated general partner’s incentive distribution rights
– Increased quarterly distribution 11% year over year

Phillips 66 Partners LP (NYSE: PSXP) announces fourth-quarter 2019 earnings of $255 million, or $1.06 per diluted common unit. Cash from operations was $259 million, and distributable cash flow was $254 million. Adjusted EBITDA was $345 million in the fourth quarter, compared with $323 million in the prior quarter.

“This quarter we delivered strong financial and operating performance, resulting in record EBITDA for the quarter and full year,” said Greg Garland, Phillips 66 Partners’ chairman and CEO. “The Gray Oak Pipeline had initial startup in November, and we look forward to it reaching full service in the second quarter of 2020. Phillips 66 Partners is a leading MLP with a strong financial position and disciplined capital allocation.”

On Jan. 21, 2020, the general partner’s board of directors declared a fourth-quarter 2019 cash distribution of $0.875 per common unit, a 5% increase over fourth quarter 2018. The Partnership has increased its distribution per common unit every quarter since its initial public offering in July 2013.

Financial Results

Phillips 66 Partners’ fourth-quarter 2019 earnings were $255 million, compared with $237 million in the third quarter of 2019. The Partnership reported adjusted EBITDA of $345 million in the fourth quarter, compared with $323 million in the prior quarter. The improvements primarily reflect increased volumes on wholly owned pipelines and terminals, as well as a full quarter of results from the isomerization unit at the Phillips 66 Lake Charles Refinery.

Liquidity, Capital Expenditures and Investments

As of Dec. 31, 2019, total debt outstanding was $3.5 billion. The Partnership had $286 million in cash and cash equivalents and $749 million available under its revolving credit facility.

The Partnership’s total capital spending for the quarter was $175 million. Growth capital included spend on the C2G Pipeline, the Sweeny to Pasadena Pipeline and the Clemens Caverns, as well as investment in the South Texas Gateway Terminal.

Strategic Update

Phillips 66 Partners commenced initial operations on the 900,000 barrels per day (BPD) Gray Oak Pipeline, which is expected to reach full service in the second quarter of 2020. The pipeline will provide crude oil transportation from the Permian and Eagle Ford to Texas Gulf Coast destinations that include Corpus Christi, the Sweeny area, including the Phillips 66 Sweeny Refinery, as well as access to the Houston market. Phillips 66 Partners has a 42.25% effective ownership in the pipeline.

The Gray Oak Pipeline will connect to multiple terminals in Corpus Christi, including the South Texas Gateway Terminal being constructed by Buckeye Partners, L.P. The marine export terminal will have two deepwater docks, with storage capacity of 8.5 million barrels and up to 800,000 BPD of throughput capacity. Phillips 66 Partners owns a 25% interest in the terminal, which is expected to start up in the third quarter of 2020.

The Partnership is increasing storage capacity at Clemens Caverns from 9 million barrels to 16.5 million barrels in connection with the Phillips 66 project to add natural gas liquid (NGL) fractionation capacity at the Sweeny Hub. The caverns expansion is expected to be completed in the fourth quarter of 2020.

Phillips 66 Partners is also constructing the C2G Pipeline, a 16 inch ethane pipeline that will connect Clemens Caverns to petrochemical facilities in Gregory, Texas, near Corpus Christi. The project is backed by long-term commitments and is expected to be completed in mid-2021.

The Sweeny to Pasadena Pipeline expansion project will add 80,000 BPD of pipeline capacity, providing additional naphtha offtake from the Sweeny fractionators. In addition, product storage capacity will increase by 300,000 barrels at the Pasadena Terminal. The project is expected to be completed in the second quarter of 2020.

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