DCP Midstream owners contribute assets to strengthen company

Phillips 66 and Spectra Energy, equal joint-venture owners in DCP Midstream LLC, entered into a non-binding letter of intent for contributing assets to strengthen DCP Midstream.

According to a press release, Phillips 66 agreed to contribute $1.5 billion in cash, which is expected to pay down a portion of the DCP Midstream revolving credit facility. Spectra Energy agreed to contribute its ownership interest in both the Sand Hills and Southern Hills natural gas liquids (NGL) pipelines.

Phillips 66 and Spectra Energy expect the transaction to provide DCP Midstream with a stronger balance sheet and increased financial flexibility. In addition, the joint-venture owners anticipate the move to position DCP Midstream to grow through commodity price cycles.

Phillips 66 and Spectra Energy anticipate the transaction to close in the fourth quarter of this year. The two will remain equal joint-venture owners of DCP Midstream following the transaction.