Phillips 66 Announces 2026 Growth Capital Budget of $1.3 Billion

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Written by Eric Funderburk for IIR News Intelligence (Sugar Land Texas)

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Summary

Refinery and pipeline owner Phillips 66 has a 2026 capital budget of $2.4 billion, including $1.3 billion for organic growth projects and $1.1 billion for sustained operations.

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Recent Accomplishments & Future Growth

The report on a company's end-of-year results always examines a year's worth of accomplishments and sets a path for future growth, and Houston-based Phillips 66 has accomplished both of these tasks in its fourth-quarter and full-year results for 2025.

Touting major accomplishments for the year, including the acquisition of WRB Refining that has led to the full ownership of two refineries in Illinois and Texas, Phillips 66 in January announced an agreement to acquire a mothballed U.K. refinery and its assets. The company has announced a 2026 capital budget of $2.4 billion, which includes $1.3 billion allocated to organic growth and $1.1 billion for sustained operations.

Refining Acquisitions & the Borger Pipeline

Phillips 66 announced the acquisition of the remaining 50% ownership interest in WRB from subsidiaries of Canada-based Cenovus energy last year. The move gives Phillips complete ownership to the 365,000-barrel-per-day (BBL/d) Wood River Refinery in Roxana, Illinois, and the 146.000-BBL/d Borger Refinery in Borger, Texas.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Refining Plant Database can learn more by viewing the plant profiles of the Wood River and Borger refineries.

The Wood River Refinery supplies refined products to the Midcontinent region through a variety of channels, including pipeline, railcar, truck and--utilizing its location on the confluence of the Mississippi and Missouri rivers--by barge.

The Borger Refinery is located in the Texas Panhandle, about 50 miles north of Amarillo, and Phillips 66's online description of the refinery states that its "Refined petroleum products are distributed to customers in West Texas, New Mexico, Colorado and the Midcontinent region by company-owned and common carrier pipelines."

However, Phillips 66 is in on the ground floor with Kinder Morgan to build a new refined products pipeline from Borger into New Mexico, Arizona and California. The latter state may prove somewhat of a goldmine for the receipt of refined products by the pipeline's completion date, as Phillips has transitioned its Rodeo Refinery in the north of the state to produce sustainable aviation fuel (SAF) and renewable diesel, and the company closed its 133,000-BBL/d Wilmington Refinery near Los Angeles at the end of 2025. Valero also is closing its 157,000-BBL/d Benecia-area refineries in the state.

If there is a strategy here, it seems to be "Leave the refining in Texas and transport the cleaner products to the lucrative California market." Having the U.S.' biggest pipeline operator, Kinder Morgan, in tow is a plus, although the refined products being distributed represents a pivot away from Kinder's more familiar natural gas territory.

Subscribers to IIR's Pipelines Project database can learn more by viewing the related project reports on Western Gateway, including pipeline construction and multiple compressor stations along the route.

U.K. Movement

But Phillips 66 is more than just a U.S. player and last month announced an addition to its U.K. assets, which already include a refinery on England's northeast coast and a terminal facility in the Midlands.

Last month, Phillips announced it would acquire the mothballed Lindsey Refinery in Lincolnshire from U.K.-based Prax. An update to IIR's plant profile of the refinery in August confirmed that Prax had shut down all refining units and was selling off all remaining stock due to insolvency.

Phillips 66 happens to have a refinery in Grimsby, Lincolnshire, the 245,000- BBL/d Humber refinery, that is mere miles from its new Lindsey asset.

While Phillips has said it will not restart "standalone refinery operations" at the site, a release this week from the company touts the acquisition of "logistics assets with the plan to utilize select assets, enhancing our U.K. integrated business." Phillips has already said that some of the Lindsey's complex's storage and infrastructure will be integrated into its Humber refinery strategies.

Potential Capital & Sustaining Spending

Industrial Info is tracking more than $4.3 billion in planned Phillips 66 capital projects, although many of these are planned for dates beyond 2026. So, where the $1.3 billion in anticipated growth capital will go remains somewhat of a guess, although the Western Gateway Pipeline, a joint venture project with a total estimated price tag of $1.5 billion, and the recently acquired U.K. refinery provide some suggestions. With new infrastructure in hand, some of the company's U.K. projects, ranging from flue-gas treatment to new refining units to a possible carbon-dioxide pipeline could kick off.

On its home U.S. turf, before Phillips purchased the Borger Refinery from WRB, plans had been laid for an upgrade and possible replacement of the refinery's control systems, which seems set to move forward later this year.

Another project probably coming within the "sustaining" category is a project that Philips inherits from WRB that is set to occur this year: upgrades to Fluid Catalytic Cracking Unit (FCCU) 2 at the recently acquired Wood River Refinery in Illinois. Phillips now inherits the task of replacing the worn reactor cyclones as well as additional upgrades to keep the unit running optimally. The project, which should take place in a matter of weeks, still weighs in with an estimated $60 million in investment.

Phillips reported fourth-quarter 2025 net earnings of $2.9 billion and full-year earnings of $4.4 billion, compared with earnings of $2.1 billion full-year 2024 and $8 million for that year's final quarter.

Key Takeaways

• Phillips 66 has a 2026 capital budget of $2.4 billion, including $1.3 billion for organic growth projects and $1.1 billion for sustained operations.
• Phillips 66 recently acquired full ownership of two refineries, including the Borger Refinery in Texas, which could be the source of refined products for a potential pipeline on which the company is teaming up to construct with Kinder Morgan.
• The company also acquired the assets to a mothballed U.K. refinery and its infrastructure located only miles away from another refinery it owns in North England.

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
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 250,000 current and future projects worth $30.2 Trillion (USD).