March 26 (Reuters) - U.S. oil refiner Phillips 66

is exploring a sale of its 25% stake in the Rockies

Express Pipeline that it hopes could be worth more than $1

billion, including debt, people familiar with the matter said on

Tuesday.

The Rockies Express Pipeline (REX) is a 1,700-mile

interstate natural gas pipeline, stretching from Wyoming and

Colorado in the Western U.S. to Eastern Ohio.

Phillips 66 is working with its advisers on talks with

potential buyers, which include private equity firms and

infrastructure funds, the sources said, requesting anonymity as

the discussions are confidential.

The Houston-based company is hoping to command a premium to

the stake's current book value of $451 million, the sources

said, adding bidders would also need to assume debt obligations

worth more than $500 million associated with the stake.

A spokesperson for Phillips 66 did not immediately respond

to a request for comment.

Phillips 66, which has a market value of $67 billion, is

aiming to raise about $3 billion from asset sales this year.

In an interview earlier on Tuesday, Chief Executive Mark

Lashier said the company was in discussions with potential

buyers for asset sales, but it was not in a rush to complete

divestments.

The company has come under pressure in recent months from

Elliott Management, which disclosed a stake in November and

pushed for Phillips 66 to improve its refining operations and

revamp its board of directors.

The activist investor last month agreed to a standstill

after Phillips 66 added a new board member approved by the

investment firm and said it would work with Elliott to identify

a second director.

The remainder of the REX pipeline is controlled by privately

owned Tallgrass Energy.

Stakes in pipelines, such as REX, are attractive to

financial investors as they like businesses with steady cash

flow, the sources said, adding stakes in interstate pipelines

are not marketed to buyers often.