Phillips 66 Partners (PSXP) has done an excellent job creating value for investors since its creation in 2013. The master limited partnership (MLP) has grown its distribution to investors for 25 consecutive quarters, which has helped push its yield up to an attractive 5.7%. That has given it the fuel to produce an impressive total return of 172%, easily outpacing the S&P 500's 125% total return during that timeframe. 

The pipeline company currently has plenty of fuel to keep growing its payout for the next couple of years. However, that didn't stop it from recently signing a deal to add a new expansion project to its backlog, which will enhance its growth outlook and ability to keep increasing its payout.

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Taking over Liberty

One of the main factors fueling Phillips 66 Partners' ability to consistently increase its distribution is its relationship with refining giant Phillips 66 (PSX 0.91%). Phillips 66 has dropped down several midstream assets to its MLP over the years as well as working with it to develop organic expansions. They're now teaming up on another deal that combines both aspects.

In this latest transaction, Phillips 66 Partners will acquire Phillip 66's 50% stake in the Liberty Pipeline for $75 million. Phillips 66 recently partnered with privately held Bridger Pipeline to build this project, which would transport oil from the Bakken and Rockies regions to an oil storage hub in Oklahoma. The companies expect the pipeline to cost $1.6 billion and enter service in the first half of next year. 

Phillips 66 Partners will now take over financing half of the project. It can afford this commitment since it has a top-notch financial profile even after recently wrapping up construction on an even larger project, the $2.7 billion Gray Oak pipeline. It owns a 42.25% interest in that pipeline, which is transporting oil from the Permian Basin to the Gulf Coast.

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Topping off the tank

Phillips 66 had four other projects under construction before agreeing to take over financing the Liberty Pipeline. It's investing $85 million into the Sweeny to Pasadena Pipeline expansion project, which should start up during the second quarter. Meanwhile, it's a 25% partner on the $625 million South Texas Gateway Terminal, which is an oil export facility in Corpus Christi, Texas, that should come online during the third quarter. It's also spending $150 million to expand the capacity of its Clemens Caverns storage facility that should be available by year's end and pouring $335 million into the C2G Pipeline that should enter service by the middle of 2021.

Those projects, along with Gray Oak, provide Phillips 66 Partners with clearly visible cash flow growth for the next couple of years since long-term contracts with customers back each project. With the addition of Liberty, -- which also has long-term agreements in place -- it has enhanced its growth profile for 2021, assuming all its projects start-up on time. Because of that, and the company's continued pledge to maintain a strong financial position, Phillips 66 Partners should be able to continue increasing its payout each quarter for at least the next couple of years.

Enhancing its ability to keep creating value

Phillips 66 Partners has an excellent track record of growing its distribution to investors. That trend appears poised to continue now that it has added the Liberty Pipeline to its backlog. As such, the MLP is now an even more appealing stock for dividend investors.