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Independent refiner, Phillips 66 (PSX - Analyst Report) is acquiring a 7.1 million barrel storage terminal near Beaumont, TX. The purchase forms a part of the company’s effort to ramp up logistics and transportation assets and will be the largest terminal in the Phillips 66 portfolio.

The terms of the transaction have not been disclosed by the companies. The deal is expected to close in the third quarter of 2014, subject to regulatory approvals.

Currently owned by UNOCAL, a member of the Chevron Corp (CVX - Analyst Report), the Beaumont terminal is strategically located on the U.S. Gulf Coast. The terminal intends to serve its own refineries as well as that of others on the U.S. Gulf Coast. Hence, it has considerable prospects of expansion.

The Beaumont terminal is located about 60 miles (96 kilometers) from Phillips' nearest refinery, its 239,400 barrel-per-day plant in Westlake, LA. It serves 3.6 million barrels per day of refining capacity, over 20% of total U.S. capacity, through deep-water access and multiple interconnections with major crude oil and refined product pipelines.

The terminal has two marine docks capable of handling Aframax tankers and one barge dock. It also provides rail and truck loading as well as unloading facilities. The terminal has a crude oil storage capacity and refined product storage capacity of 4.7 million barrels and 2.4 million barrels, respectively.  

The purchase forms a part of the company’s midstream growth strategy. The Beaumont terminal is positioned to benefit from the expectations of rising volumes of North American crude oil movement into the Gulf Coast region and boost in refined product exports.

Currently, Phillips 66 carries a Zacks Rank #3 (Hold). Investors interested in the oil and gas industry could consider stocks like Encana Corp (ECA - Analyst Report) and Matrix Service Co. (MTRX - Snapshot Report). All of these stocks sport a Zacks Rank #1 (Strong Buy).

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