Phillips 66 and Plains All American Announce Strategic JV and Sanctioning of Red Oak Pipeline System

HOUSTON–(BUSINESS WIRE)–Phillips 66 (NYSE: PSX)
and Plains All American Pipeline (Plains) (NYSE: PAA)
announced that they have formed a 50/50 joint venture, Red Oak Pipeline
LLC, and are proceeding with construction of the Red Oak Pipeline system
(Red Oak). The pipeline system will provide crude oil transportation
service from Cushing, Oklahoma, and the Permian Basin in West Texas to
Corpus Christi, Ingleside, Houston and Beaumont, Texas. Red Oak is
underpinned with long-term shipper volume commitments. Initial service
from Cushing to the Gulf Coast is targeted to commence as early as the
first quarter of 2021, subject to receipt of applicable permits and
regulatory approvals.

“We are pleased to partner with Plains to build Red Oak,” said Greg
Garland, Phillips 66 chairman and CEO. “The pipeline provides a
competitive outlet for shippers to access the key market centers along
the Texas Gulf Coast from Cushing and the Permian. This investment
aligns with our long-term strategy to grow our Midstream business with
projects generating stable, fee-based earnings while further enhancing
integration across our value chain.”

“Red Oak represents a capital-efficient industry solution that will
utilize existing assets and provide pull-through benefits to our
systems,” stated Willie Chiang, CEO of Plains All American. “We look
forward to working closely with Phillips 66 and our committed shippers
to bring Red Oak into service and further optimize our assets upstream
and downstream of the new pipeline system. We also look forward to
creating jobs and supporting economic growth in Oklahoma and Texas.”

The Red Oak joint venture will lease capacity in Plains’ Sunrise
Pipeline system, which extends from Midland to Wichita Falls, Texas. The
joint venture plans to construct a new 30-inch pipeline from Cushing to
Wichita Falls and Sealy, Texas. From Sealy, the joint venture will
construct a 30-inch pipeline segment to Corpus Christi and Ingleside and
a 20-inch pipeline segment to Houston and Beaumont. Where feasible, Red
Oak will utilize existing pipeline and utility corridors and advanced
construction techniques to limit environmental and community impact.
Plains will lead project construction on behalf of the joint venture,
and Phillips 66 will operate the pipeline. The project is expected to
cost approximately $2.5 billion.

The joint venture plans to hold a supplemental binding open season to be
announced at a later date that will enable additional shippers to enter
into long-term transportation services agreements.

About Phillips 66

Phillips 66 is a diversified energy manufacturing and logistics company.
With a portfolio of Midstream, Chemicals, Refining, and Marketing and
Specialties businesses, the company processes, transports, stores and
markets fuels and products globally. Phillips 66 Partners, the company’s
master limited partnership, is integral to the portfolio. Headquartered
in Houston, the company has 14,300 employees committed to safety and
operating excellence. Phillips 66 had $58 billion of assets as of March
31, 2019. For more information, visit http://www.phillips66.com
or follow us on Twitter @Phillips66Co.

CAUTIONARY STATEMENT FOR THE PURPOSES OF THE “SAFE HARBOR”
PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This news release contains certain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, which are intended to be covered by the safe harbors created
thereby. Words and phrases such as “is anticipated,” “is estimated,” “is
expected,” “is planned,” “is scheduled,” “is targeted,” “believes,”
“continues,” “intends,” “will,” “would,” “objectives,” “goals,”
“projects,” “efforts,” “strategies” and similar expressions are used to
identify such forward-looking statements. However, the absence of these
words does not mean that a statement is not forward-looking.
Forward-looking statements relating to Phillips 66’s operations
(including joint venture operations) are based on management’s
expectations, estimates and projections about the company, its interests
and the energy industry in general on the date this news release was
prepared. These statements are not guarantees of future performance and
involve certain risks, uncertainties and assumptions that are difficult
to predict. Therefore, actual outcomes and results may differ materially
from what is expressed or forecast in such forward-looking statements.
Factors that could cause actual results or events to differ materially
from those described in the forward-looking statements include
fluctuations in NGL, crude oil, and natural gas prices, and
petrochemical and refining margins; unexpected changes in costs for
constructing, modifying or operating our facilities; unexpected
difficulties in manufacturing, refining or transporting our products;
lack of, or disruptions in, adequate and reliable transportation for our
NGL, crude oil, natural gas, and refined products; potential liability
from litigation or for remedial actions, including removal and
reclamation obligations under environmental regulations; limited access
to capital or significantly higher cost of capital related to
illiquidity or uncertainty in the domestic or international financial
markets; the impact of adverse market conditions or other similar risks
to those identified herein affecting PSXP, as well as the ability of
PSXP to successfully execute its growth plans; and other economic,
business, competitive and/or regulatory factors affecting Phillips 66’s
businesses generally as set forth in our filings with the Securities and
Exchange Commission. Phillips 66 is under no obligation (and expressly
disclaims any such obligation) to update or alter its forward-looking
statements, whether as a result of new information, future events or
otherwise.

About Plains All American Pipeline

Plains All American Pipeline (NYSE: PAA) is a publicly traded master
limited partnership that owns and operates midstream energy
infrastructure and provides logistics services for crude oil, NGLs and
natural gas. PAA owns an extensive network of pipeline transportation,
terminalling, storage, and gathering assets in key crude oil and NGL
producing basins and transportation corridors and at major market hubs
in the United States and Canada. On average, PAA handles more than 6
million barrels per day of crude oil and NGL in its Transportation
segment. PAA is headquartered in Houston, Texas. More information is
available at www.plainsallamerican.com.

FORWARD-LOOKING STATEMENTS

Certain matters discussed in this release are forward-looking
statements that involve risks and uncertainties that could cause actual
results or outcomes to differ materially from results or outcomes
anticipated in the forward-looking statements. These risks and
uncertainties include, among other things, shortages, cost increases or
delay in receipt of supplies, materials or labor; failure to implement
or capitalize, or delays in implementing or capitalizing, on expansion
projects, whether due to permitting delays, permitting withdrawals or
other factors; the effects of competition, including the effects of
capacity overbuild in areas where we operate; the impact of current and
future laws, rulings, orders, governmental regulations, accounting
standards and statements and related interpretations; weather
interference with business operations or project construction, including
the impact of extreme weather events or conditions; environmental
liabilities, issues or events that result in construction delays or
otherwise impact targeted in-service dates; interruptions in service on
third-party pipelines or facilities; general economic, market or
business conditions and the amplification of other risks caused by
volatile financial markets, capital constraints and pervasive liquidity
concerns; and other factors and uncertainties inherent in the
transportation, storage, terminalling and marketing of crude oil as
discussed in PAA’s filings with the Securities and Exchange Commission.

Contacts

Phillips 66

Jeff Dietert (investors)
832-765-2297
[email protected]

Brent Shaw (investors)
832-765-2297
[email protected]

Dennis Nuss (media)
832-765-1850
[email protected]

Plains All American Pipeline

Roy Lamoreaux (investors)
866-809-1291

Brett Magill (investors)
866-809-1291

Brad Leone (media)
866-809-1290

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