Phillips 66 (PSX) finished the year advancing a wellhead-to-market strategy within its midstream business and plans to keep up an ambitious rate of growth going into 2025.

In early January, the company announced a $2.2 billion deal for EPIC’s Y-Grade Texas NGL assets, bolstering the company’s links between fractionation and shipping facilities. The move followed major acquisitions over the last two years. PSX also bought Midland Basin gas and processing assets from Pinnacle Midstream in 2024 for $550 million. In 2023, the company purchased gathering, processing, logistics and marketing assets from MLP DCP Midstream for $3.8 billion.

In 2021, the company’s adjusted EBITDA for its midstream business was $2.1 billion. After the EPIC deal, the unit’s EBITDA has grown to $4 billion, according to figures from PSX.

“Since our EPIC acquisition, we've gotten a great response from the market, good questions, understanding,” said Mark Lashier, Phillips 66 chairman and CEO, during the company’s fourth-quarter earnings call on Jan. 31. “People are showing some interest and excitement around that.”

Strong competition for NGL barrels emerged in the Permian Basin in 2024, according to an East Daley Analytics (EDA) report following the EPIC purchase in January. NGLs became a profitable segment of operations even as prices for natural gas struggled through a year of oversupply.

In October 2024, the U.S. Energy Information Administration reported a new Lower 48 NGL production high of 7.23 MMbbl/d, driven largely by infrastructure projects that de-bottlenecked supply from the Permian—especially for highly demanded ethane.

Steady NGL growth has led companies with major midstream assets to consolidate vertically and focus on assets that can deliver from the production areas to its refineries.

“We're not going to grow midstream just to grow midstream, just to get bigger,” Lashier said. “We're going to grow midstream to create more value for our shareholders. And we're very disciplined around that.”

The increasing ownership of integrated NGL midstream shows that companies see an advantage in extracting ethane from their processing plants, EDA reported. A molecule of ethane is more valuable to an integrated company than a molecule of gas because they can charge a fee on multiple points, such as transport, storage, fractionation and export.

PSX reported record NGL fractionation and LPG export volumes for the quarter.

Overall, Phillips 66 posted an adjusted earnings loss of $61 million for fourth-quarter 2024. That came amid a pre-tax depreciation for a refinery in Los Angeles, which affected earnings by $230 million, the company said. For the year, the company reported adjusted earnings of $2.4 billion or $6.15 per share.