Jan 6 (Reuters) - U.S. oil refiner Phillips 66

said on Monday it would acquire various pipelines and

distribution systems from Ares-backed EPIC NGL in an all-cash

deal for $2.2 billion, as it seeks to expand its Permian

presence.

The U.S. shale industry has witnessed a record-breaking wave

of dealmaking in the recent past, as energy companies have

rushed to expand oil and gas drilling inventories, especially in

the Permian Basin oil field.

Phillips 66 would acquire EPIC Y-Grade GP and EPIC Y-Grade,

and its various subsidiaries under the deal, which is expected

to be immediately accretive to earnings per share, it said in

its statement.

"This transaction optimizes our Permian NGL value chain,

allows Phillips 66 to provide producers with comprehensive flow

assurance and is expected to deliver attractive returns in

excess of our hurdle rates," said Phillips 66 CEO Mark Lashier.

While EPIC is in the process of increasing its pipeline

capacity to 225 million barrels per day (mbd) and has sanctioned

a second expansion to increase capacity to 350 mbd, Phillips 66

said it does not expect to increase its 2025 capital program in

connection with the expansion.

The deal marks a shift away from Phillips 66's efforts of

cutting costs and pursuing divestitures through non-core asset

sales. In December 2024, Phillips 66 sold its 25% stake in the

Gulf Coast Express pipeline in Texas to an affiliate of ArcLight

Capital Partners for $865 million.