Recasts throughout with details and background

Jan 6 (Reuters) - U.S. oil refiner Phillips 66 PSX.N said on Monday it would acquire various pipelines and distribution systems from Ares-backed EPIC NGL in an all-cash deal for $2.2 billion, as it seeks to expand its Permian presence.

The U.S. shale industry has witnessed a record-breaking wave of dealmaking in the recent past, as energy companies have rushed to expand oil and gas drilling inventories, especially in the Permian Basin oil field.

Phillips 66 would acquire EPIC Y-Grade GP and EPIC Y-Grade, and its various subsidiaries under the deal, which is expected to be immediately accretive to earnings per share, it said in its statement.

"This transaction optimizes our Permian NGL value chain, allows Phillips 66 to provide producers with comprehensive flow assurance and is expected to deliver attractive returns in excess of our hurdle rates," said Phillips 66 CEO Mark Lashier.

While EPIC is in the process of increasing its pipeline capacity to 225 million barrels per day (mbd) and has sanctioned a second expansion to increase capacity to 350 mbd, Phillips 66 said it does not expect to increase its 2025 capital program in connection with the expansion.

The deal marks a shift away from Phillips 66's efforts of cutting costs and pursuing divestitures through non-core asset sales. In December 2024, Phillips 66 sold its 25% stake in the Gulf Coast Express pipeline in Texas to an affiliate of ArcLight Capital Partners for $865 million.

(Reporting by Devika Nair in Bengaluru; Editing by Rashmi Aich)

((Devika.MadhusudhananNair@thomsonreuters.com;))