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Berkshire Hathaway Will Exchange Around Shares Of Phillips 66 (NYSE:PSX) for 100% – Ownership Of Its Pipeline-Services

Boston, MA 01/01/2014 (wallstreetpr) – Berkshire Hathaway will now swap approximately $1.4B in shares of Phillips 66 (NYSE:PSX) for 100% – ownership of the company’s pipeline-services business even as Warren Buffett, the billionaire expands his interest in the oil transportation business.

In its regulatory filing, Phillips 66 (NYSE:PSX) said that Berkshire will exchange almost 19M shares. The exact number of the shares that Berkshire will pay while acquiring Phillips Specialty Products will be decided once the del reaches completion said Phillips 66 (NYSE:PSX).

A Boom in drilling in the United States has also led to a rise in the production of natural gas and crude oil. This in turn, has prompted pipeline operators to increase capacity. The Polymer-based additives, which are the focus-point of Phillips 66 (NYSE:PSX) business unit, are utilized for moving products more efficiently through the pipe as they reduce drag. These can thus increase the capacity at times when the approvals for any new pipelines are late in coming in.

Accufacts Inc, is a pipeline consulting firm based in Redmond, Washington. Richard Kuprewicz, the president of this firm said that Berkshire is betting on this particular space as there are numerous liquids pipelines that are currently operating at capacity in the United States. This is one way of increasing the capacity of the pipelines fast, without having to wait for any permits.

Berkshire has already profited from expansion of energy production in the United States. The company’s Burlington Northern Santa-Fe railroad has already been boosting the shipments of crude-oil and also been investing in infrastructure to carry additional petroleum to the refineries. Apart from this, It also owns pipelines via MidAmerican Energy Holdings.

About the company

Phillips 66 (NYSE:PSX) is a holding company that is involved in the production of NGL’s & petrochemicals. Phillips 66 (NYSE:PSX) operates in 3 segments: 1) the Refining and Marketing segment, 2) the Midstream segment and 3) the Chemicals segment.

Published by Steve Hackney

Steve Hackney is a corporate finance professional with over 14 years of experience in cash management and investing. He earned a Bachelor of Science in Finance from Florida State University and holds a Certified Treasury Professional certification. Steve lives in Orlando, Florida with his family.

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