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Released December 12, 2023 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Phillips 66 (NYSE:PSX) (Houston, Texas) plans to spend $2.2 billion on its 2024 capital program, the refining, midstream and chemical company announced last week. The capital plan includes $923 million for sustaining capital and $1.3 billion for growth projects, which includes the completion of the "Rodeo Renewed" renewable diesel project in California.
Phillips 66 plans to invest $1.1 billion in its Refining segment. Growth capital of $654 million includes completing the "Rodeo Renewed" project, which involves converting the existing 120,000 barrel-per-day (BBL/d) Rodeo Refinery in the San Francisco Bay area to produce 680 million gallons per year of renewable diesel, renewable gasoline and sustainable aviation fuel. The converted facility will use waste oils, fats, greases and vegetable oils as feedstock.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Petroleum Refining and Alternative Fuel Project and Plant databases can click here for the related project reports and click here for the plant profiles.
Although construction is underway, full operations may not begin in the first quarter as expected. Earlier this year, two environmental groups filed a lawsuit alleging Contra Costa County's approved Environmental Impact Report (EIR) insufficiently addressed project impacts, and the court ordered the county to redo its review. In Phillips 66's third-quarter earnings conference call, Senior Vice President, Refining, Rich Harbison, said he expects the county will issue a final EIR in early 2024.
"There is flexibility to continue crude operation in the event that circumstances beyond our control prevent the start-up of the project," Harbison said. "I want to say we are committed to the start-up of the project, but if for some reason we don't have that authority, we will continue to operate in crude operation. This is a staggered conversion process.
Refining growth capital "will also support high-return, low-capital projects to enhance market capture," the company said.
Phillips 66 is performing renovation work at the marine oil terminal of the Wilmington portion of its refinery in Los Angeles, California. In addition to work at four berths (148-151), the project entails renovating the unloading dock and supporting utilities to enable the refinery to receive crude shipments from North Dakota's Bakken Shale via barge originating at Phillips 66's Ferndale Refinery in Washington, to reduce the amount of crude oil being piped into the Los Angeles refinery. Next year, the company also plans to repair and retrofit 21 tanks in the four berths. Construction on both projects is expected to wrap up by the end of the year. Subscribers can read detailed information on the renovation and tank farm projects, and click here for a profile on the Ferndale Refinery.
Elliott Investment Management (New York, New York) late last month disclosed a $1 billion stake in Phillips 66 with a focus on its refining performance. In a letter to the Phillips 66 Board of Directors, Elliott Partner John Pike and Mike Tomkins, a portfolio manager, said: "Phillips 66's performance has declined as it has shifted its focus away from its Refining segment .... achieving safe, reliable and efficient refining operations is paramount to reversing Phillips 66's underperformance."
Phillips 66 said it will allocate $985 million for its Midstream segment, which includes $392 million for sustaining projects and $593 million for growth projects; the growth capital will be "focused on enhancing the company's integrated NGL wellhead-to-market value chain."
Phillips 66 expects to see growth in the Midstream segment from its purchase of all publicly held common units of DCP Midstream LP (Denver, Colorado), increasing Phillips 66's economic interest in DCP to 86.8%. DCP is a joint venture between Phillips 66 and Enbridge Incorporated (NYSE:ENB) (Calgary, Alberta). For more information, see August 19, 2022, article - Phillips 66 Eyes Bigger Midstream Role with DCP Acquisition.
Meanwhile growth capital for two of Phillips 66's other joint ventures is projected to total $1 billion and will be self-funded: its refining joint venture with Cenovus Energy Incorporated (NYSE:CVE) (Calgary, Alberta), WRB Refining LP (WRB), and its chemicals joint venture with Chevron Corporation (NYSE:CVX) (San Ramon, California), Chevron Phillips Chemical Company LLC (CPChem) (The Woodlands, Texas).
WRB's capital spending will be directed to sustaining projects and enhancing market capture, according to the press release.
CPChem's growth capital will go toward construction of two world-scale petrochemical facilities, one on the Texas Gulf Coast and the other in Ras Laffan, Qatar. Subscribers to the GMI Chemical Processing Project Database can click here for reports related to the Gulf Coast project and click here for the reports on the Ras Laffan project. Both facilities are expected to begin operating in 2026.
For more information on the projects as well as Chevron's planned 2024 capex, see December 8, 2023, article - Chevron Plans $16 Billion in 2024 Capex, Led by U.S. Upstream.
Subscribers to Industrial Info's GMI Database can click here for a full list of detailed reports for projects mentioned in this article and click here for a full list of 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).
Phillips 66 plans to invest $1.1 billion in its Refining segment. Growth capital of $654 million includes completing the "Rodeo Renewed" project, which involves converting the existing 120,000 barrel-per-day (BBL/d) Rodeo Refinery in the San Francisco Bay area to produce 680 million gallons per year of renewable diesel, renewable gasoline and sustainable aviation fuel. The converted facility will use waste oils, fats, greases and vegetable oils as feedstock.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Petroleum Refining and Alternative Fuel Project and Plant databases can click here for the related project reports and click here for the plant profiles.
Although construction is underway, full operations may not begin in the first quarter as expected. Earlier this year, two environmental groups filed a lawsuit alleging Contra Costa County's approved Environmental Impact Report (EIR) insufficiently addressed project impacts, and the court ordered the county to redo its review. In Phillips 66's third-quarter earnings conference call, Senior Vice President, Refining, Rich Harbison, said he expects the county will issue a final EIR in early 2024.
"There is flexibility to continue crude operation in the event that circumstances beyond our control prevent the start-up of the project," Harbison said. "I want to say we are committed to the start-up of the project, but if for some reason we don't have that authority, we will continue to operate in crude operation. This is a staggered conversion process.
Refining growth capital "will also support high-return, low-capital projects to enhance market capture," the company said.
Phillips 66 is performing renovation work at the marine oil terminal of the Wilmington portion of its refinery in Los Angeles, California. In addition to work at four berths (148-151), the project entails renovating the unloading dock and supporting utilities to enable the refinery to receive crude shipments from North Dakota's Bakken Shale via barge originating at Phillips 66's Ferndale Refinery in Washington, to reduce the amount of crude oil being piped into the Los Angeles refinery. Next year, the company also plans to repair and retrofit 21 tanks in the four berths. Construction on both projects is expected to wrap up by the end of the year. Subscribers can read detailed information on the renovation and tank farm projects, and click here for a profile on the Ferndale Refinery.
Elliott Investment Management (New York, New York) late last month disclosed a $1 billion stake in Phillips 66 with a focus on its refining performance. In a letter to the Phillips 66 Board of Directors, Elliott Partner John Pike and Mike Tomkins, a portfolio manager, said: "Phillips 66's performance has declined as it has shifted its focus away from its Refining segment .... achieving safe, reliable and efficient refining operations is paramount to reversing Phillips 66's underperformance."
Phillips 66 said it will allocate $985 million for its Midstream segment, which includes $392 million for sustaining projects and $593 million for growth projects; the growth capital will be "focused on enhancing the company's integrated NGL wellhead-to-market value chain."
Phillips 66 expects to see growth in the Midstream segment from its purchase of all publicly held common units of DCP Midstream LP (Denver, Colorado), increasing Phillips 66's economic interest in DCP to 86.8%. DCP is a joint venture between Phillips 66 and Enbridge Incorporated (NYSE:ENB) (Calgary, Alberta). For more information, see August 19, 2022, article - Phillips 66 Eyes Bigger Midstream Role with DCP Acquisition.
Meanwhile growth capital for two of Phillips 66's other joint ventures is projected to total $1 billion and will be self-funded: its refining joint venture with Cenovus Energy Incorporated (NYSE:CVE) (Calgary, Alberta), WRB Refining LP (WRB), and its chemicals joint venture with Chevron Corporation (NYSE:CVX) (San Ramon, California), Chevron Phillips Chemical Company LLC (CPChem) (The Woodlands, Texas).
WRB's capital spending will be directed to sustaining projects and enhancing market capture, according to the press release.
CPChem's growth capital will go toward construction of two world-scale petrochemical facilities, one on the Texas Gulf Coast and the other in Ras Laffan, Qatar. Subscribers to the GMI Chemical Processing Project Database can click here for reports related to the Gulf Coast project and click here for the reports on the Ras Laffan project. Both facilities are expected to begin operating in 2026.
For more information on the projects as well as Chevron's planned 2024 capex, see December 8, 2023, article - Chevron Plans $16 Billion in 2024 Capex, Led by U.S. Upstream.
Subscribers to Industrial Info's GMI Database can click here for a full list of detailed reports for projects mentioned in this article and click here for a full list of 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).
