The deal includes two natural gas pipeline systems based in Texas, as well as a 19.46 percent interest in the Explorer Pipeline Company, which operates a pipeline carrying refined products between the Gulf Coast and the Midwest in the United States.
The company, a master limited partnership formed by Phillips 66, expects the deal to be accretive immediately.
A more than 50 percent slump in oil prices due to global oversupply and tepid demand is spurring consolidation in the energy industry.
Under terms of the deal, Phillips 66 will receive a total of $1.01 billion consisting of $880 million in cash and 1.7 million Phillips 66 Partners’ units.
The terms of the deal were approved by the board of Phillips 66 Partners.
Up to Friday’s close, shares of the Houston-based company have risen about 87 percent in the last 12 months on the New York Stock Exchange. Shares of its parent, Phillips 66, have risen nearly 3 percent during that time.
Reporting by Narottam Medhora in Bengaluru; Editing by Eric Walsh and Chris Reese