Phillips 66 Partners (PSXP), the master limited partnership created by its namesake parent, made its New York Stock Exchange debut Tuesday and saw its shares rally 30% above the IPO price to $29.91 in early afternoon trading.
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The Phillips 66 subsidiary wrapped up an initial public offering that totaled $377.8 million, surpassing expectations of $315 million. The company’s units, essentially its shares, started at $23 versus a target range of $19 to $21. Phillips 66 Partners also sold 9.5% more shares than it initially planned.
Phillips 66 (PSX) formed the MLP by carving out some of its oil pipelines and terminal and storage systems—used for crude oil and refined petroleum product—in the Central and Gulf Coast regions.
Commercial agreements with the refining and marketing company, which itself was spun off last year by oil and exploration giant ConocoPhillips (COP), will account for nearly all of Phillips 66 Partners’ revenue.
Several oil and gas companies, such as Tesoro (TSO), have formed MLPs to house their midstream businesses.