Phillips 66 Partners to Construct West Texas Crude Oil Pipeline System, Hold Second Open Season

HOUSTON–(BUSINESS WIRE)–Phillips 66 Partners (NYSE: PSXP) announced that it has received
sufficient binding commitments on an initial open season to proceed with
construction of the Gray Oak Pipeline system. The Gray Oak Pipeline will
provide crude oil transportation from West Texas to destinations in the
Corpus Christi and Sweeny/Freeport markets. Origination stations will be
constructed in Reeves, Loving, Winkler, and Crane counties in West
Texas, as well as from locations in the Eagle Ford production area in
South Texas. The pipeline is expected to be placed in service by the end
of 2019, and is backed by long-term, third-party, take-or-pay
commitments with primarily investment-grade customers.

Gray Oak Pipeline, LLC, a joint venture owned 75 percent by Phillips 66
Partners and 25 percent by Andeavor (NYSE: ANDV), will own the pipeline
system. Other third parties, including Enbridge Inc. (TSX, NYSE: ENB),
have an option to acquire up to 32.75 percent interest in the joint
venture. If all options are exercised, Phillips 66 PartnersÔÇÖ ownership
would be 42.25 percent and AndeavorÔÇÖs ownership would remain 25 percent.

Gray Oak Pipeline, LLC received enough volume commitments in the form of
precedent agreements to hold a second binding open season. This open
season provides an opportunity for additional shippers to enter into
transportation services agreements that provide long-term crude oil
transportation on the Gray Oak Pipeline. The ultimate scope and capacity
of the pipeline will depend on the outcome of the second open season.
Subject to the results of the open season, the Gray Oak Pipeline could
transport up to 700,000 barrels per day or more of crude oil from the
Permian Basin to downstream markets. Assuming the pipeline is fully
subscribed, its capacity could ultimately be expanded to approximately 1
million barrels per day of long-haul takeaway.

In Corpus Christi, the Gray Oak Pipeline will connect to a new joint
venture marine terminal under development by Buckeye Partners, L.P.
(NYSE: BPL). Buckeye will have a 50 percent interest in the terminal
joint venture and will be the operator, while Phillips 66 Partners and
Andeavor each will have a 25 percent ownership interest. The terminal
will have an initial storage capacity of 3.4 million barrels and is
expected to begin operations by the end of 2019.

The Gray Oak Pipeline second open season will commence at 3 p.m. CDT on
April 26, 2018. Prior to participating in the open season, interested
parties must execute a confidentiality agreement to govern the receipt
of the open season documentation. For a form of confidentiality
agreement and additional information regarding the Gray Oak Pipeline,
please contact Corey Leonard at [email protected].

About Phillips 66 Partners

Headquartered in Houston, Phillips 66 Partners is a growth-oriented
master limited partnership formed by Phillips 66 to own, operate,
develop and acquire primarily fee-based crude oil, refined petroleum
products and natural gas liquids pipelines and terminals and other
transportation and midstream assets. For more information, visit www.phillips66partners.com.

CAUTIONARY STATEMENTS

This press release contains forward-looking statements as defined
under the federal securities laws, including projections, plans and
objectives. Although Phillips 66 Partners believes that expectations
reflected in such forward-looking statements are reasonable, no
assurance can be given that such expectations will prove to be correct.
In addition, these statements are subject to certain risks,
uncertainties and other assumptions that are difficult to predict and
may be beyond Phillips 66 PartnersÔÇÖ control. If one or more of these
risks or uncertainties materialize, or if underlying assumptions prove
incorrect, actual results may vary materially from what Phillips 66
Partners anticipated, estimated, projected or expected. The key risk
factors that may have a direct bearing on the forward-looking statements
are the accuracy of our assumptions used to estimate the timing of
permit receipts and the construction schedule, the ultimate number of
co-venturers and associated ownership interests, and our ability to
successfully construct and integrate the assets into our operations, and
other factors as described in the filings that Phillips 66 Partners
makes with the Securities and Exchange Commission. In light of these
risks, uncertainties and assumptions, the events described in the
forward-looking statements might not occur or might occur to a different
extent or at a different time than as described. All forward-looking
statements in this release are made as of the date hereof and Phillips
66 Partners undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.

TAX CONSIDERATIONS

This release is intended to be a qualified notice to nominees as
provided for under Treasury Regulation Section 1.1446-4(b)(4) and (d).
Please note that 100 percent of Phillips 66 Partners LPÔÇÖs distributions
to foreign investors are attributable to income that is effectively
connected with a United States trade or business. Accordingly, all of
Phillips 66 Partners LPÔÇÖs distributions to foreign investors are subject
to federal income tax withholding at the highest applicable effective
tax rate. Nominees, and not Phillips 66 Partners LP, are treated as the
withholding agents responsible for withholding on the distributions
received by them on behalf of foreign investors.

Contacts

Phillips 66 Partners
Jeff Dietert, 832-765-2297 (investors)
[email protected]
or
Rosy
Zuklic, 832-765-2297 (investors)
[email protected]
or
Dennis
Nuss, 832-765-1850 (media)
[email protected]