May 20 (Reuters) - Phillips 66 on Monday agreed

to acquire Pinnacle Midland, a midstream company owned by

private equity firm Energy Spectrum Capital, for $550 million in

cash, expanding the U.S. refiner's natural gas gathering and

processing footprint in the Midland Basin.

Oil and gas producers in the United States went on a nearly

$250 billion buying spree in 2023, taking advantage of their

high stock prices to secure lower-cost reserves, continuing the

trend in 2024. In 2023, some 39 private companies were acquired

by public companies.

The Midland basin in Texas, in the Permian shale, is the

nation's biggest oil and second biggest gas producing basin.

"Pinnacle is a bolt-on asset that advances our

wellhead-to-market strategy," said Mark Lashier, CEO of Phillips

66.

"Further, this transaction aligns with our long-term

objectives to build out our natural gas liquids value chain."

Phillips 66 holds 11 natural gas liquids (NGL) fractionation

plants, along with natgas and NGL storage facilities and NGL

pipelines, and 22,000 miles of pipelines.

Pinnacle's assets include the Dos Picos natgas complex with

a processing capacity of 220 million cubic feet per day (mmcfd),

and 80 miles of pipelines.

The complex could be scalable toward a second 220 mmcfd gas

plant and would integrate well into Phillip 66's existing

downstream infrastructure, the company said in a statement.

The transaction is expected to close mid-2024.