$Phillips 66 (PSX.US)$It was agreed to acquire Pinnacle Midland Parent LLC from private equity firm Energy Spectrum Capital for $550 million in cash to expand the Midland Basin gas processing business.

Pinnacle's assets include the recently built Dos Picos system, which can process 220 million cubic feet of gas per day. The company also has 80 miles of pipelines and 50,000 acres of dedicated area in one of Phillips 66's key basins. The two companies said the processing complex and associated infrastructure are easy to expand.

The deal is expected to close by the middle of this year.