Phillips 66 Shows Strong Quarterly Results

Researched by Industrial Info Resources (Sugar Land, Texas)--Refining, midstream and chemical company Phillips 66 (NYSE:PSX) (Houston, Texas) showed strong operational results in the recently completed first quarter of 2023, boosting net income to $2 billion from $582 million in the corresponding period of 2022. A substantial portion of the year-over-year gains came from the company's Refining segment, which saw strong margins and substantially boosted its operational income from the prior year.

Midstream Segment
Phillips 66's Midstream segment reported first-quarter pre-tax income of $702 million, compared with $242 million in the prior year. This segment is expected to see growth as Phillips 66 approaches completion of its purchase of all publicly held common units of DCP Midstream LP (NYSE:DCP) (Denver, Colorado). The transaction is expected to close in the second quarter of this year. DCP employees transitioned into Phillips 66 at the start of April. The transaction will increase Phillips 66's economic interest in DCP to 86.8%. For more information, see August 19, 2022, article - Phillips 66 Eyes Bigger Midstream Role with DCP Acquisition.

Chemicals Segment
Phillips 66's Chemicals segment covers activity from Chevron Phillips Chemical Company (CPChem) (The Woodlands, Texas), its joint venture with Chevron Corporation (NYSE:CVX) (San Ramon, California).

The company is pursuing a portfolio of high-return projects, both here and in the Middle East. At the Sweeny Hub in Old Ocean, Texas, CPChem is adding a new, world-scale 1-hexene unit to produce 266,000 tons per year. The project kicked off in late 2021. At its Cedar Bayou facility in Baytown, Texas, CPChem is constructing a new 1 billion-pound-per-year propylene splitter. Both projects are expected to be completed in the second half of this year. Subscribers to Industrial Info's Global Market Intelligence (GMI) Chemical Processing Project Database can learn more by viewing the project reports on the 1-hexene unit and the propylene splitter.

CPChem and QatarEnergy (Doha, Qatar) are building joint-venture petrochemical facilities on the Texas Gulf Coast and in Ras Laffan, Qatar. The Gulf Coast facility will include a 4.6 billion-pound-per-year ethane cracker and two high-density polyethylene (HDPE) units with a combined capacity of 4.4 billion pounds per year. CPChem owns a 51% stake in the project. The Ras Laffan facility, in which CPChem holds a 30% stake, will feature a 4.6 billion-pound-per-year ethane cracker and two HDPE units with a combined capacity of 3.7 billion pounds per year. Both facilities are expected to begin operating in 2026.

Subscribers can click here for reports related to the Gulf Coast project and click here for the reports on the Ras Laffan project.

Refining Segment
The Refining segment is where Phillips 66 really shone in the just-passed quarter, boosting first-quarter reported pre-tax income to $1.6 billion from $123 million in the prior year. The company said its realized margins soared 91% from a year earlier to $20.72 per barrel in first-quarter 2023. The company's crude utilization rate was 90% during the quarter. In this week's earnings-related conference call, Chief Financial Officer Kevin Mitchell said the company plans for its 11 refineries to run in the mid-90% range of their combined 1.9 million barrels per day (BBL/d) of capacity in the second quarter.

Phillips 66's largest project in this segment is the Rodeo Renewed project at its refinery in Rodeo, California, which aims to turn the facility into one of the U.S.' largest renewable fuels production sites. The project kicked off last summer and upon completion, which is expected early next year, the facility will ramp up to 680 million gallons per year of renewable fuels production, including renewable diesel, renewable gasoline and sustainable aviation fuel from cooking oils, fats, greases and soybean oil. Subscribers to Industrial Info's Refining Project Database can click here for the full report.

As part of its restructuring in California, Phillips 66 shut down its Santa Maria Refinery in San Luis Obispo County in February. Demolition and remediation are expected to be completed later this year. Subscribers can click here for more details.

Among the company's other refining projects on the slate for this year is the expansion and upgrade of the 12,000-BBL/d hydrofluoric acid alkylation (HF alky) unit at its refinery in Ponca City, Oklahoma. New cooling towers will be installed to operate in parallel with the existing tower and other replacements and improvements made to recirculation pumps and overhead condensers. The project is expected to be completed by the end of this year. Subscribers can click here for more details.

Subscribers to Industrial Info's GMI Database can click here to see reports for all of the projects discussed in this article and click here for the related plant profiles.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 trillion (USD).