Phillips 66 Boosts 2026 Capex to $2.4 Billion, Focusing on NGLs, Refining

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Written by Danny Levin, Deputy Editor for Industrial Info Resources (Sugar Land, Texas)

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Summary

Philips 66 has approved a $2.4 billion capital budget for 2026, which is slightly above this year's forecast, with growth spending geared toward the company's midstream natural gas liquids network and high-return refining projects.

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Phillips 66's 2026 Capital Budget

Phillips 66's (Houston, Texas) recently-approved 2026 capital budget of $2.4 billion includes $1.1 billion for the Midstream and Refining segments, respectively.

This is up slightly from the 2025 forecast of $2.1 billion, including an estimated $975 million for the Midstream segment and $822 million for the Refining segment.

"We are investing growth capital in our NGL [natural gas liquids] value chain and high-return refining projects, while also investing sustaining capital to support safe and reliable operations," Mark Lashier, Phillips 66's chairman and chief executive officer, said in a press release.

The Midstream budget for 2026 includes $400 million for sustaining projects and $700 million of growth capital. "The projects organically advance the company's integrated NGL wellhead-to-market strategy by increasing gas processing, pipeline and fractionation capacity in key basins."

The NGL investments are aimed at expanding pipeline/fractionation capacity in the Permian and Eagle Ford shale basins.

The Iron Mesa Natural Gas Processing Plant, being built in the Permian Basin, will be capable of processing 300 million standard cubic feet per day. The plant is expected to start up in the first quarter of 2027.

Also included is a proposed fractionator in Corpus Christi, Texas, which is designed to add 100 million barrels per day of NGL fractionation capacity, according to Phillips 66's press release. This initially was proposed by EPIC Midstream in 2019, and now that Phillips 66 has acquired EPIC, the former will be developing the project.

Subscribers to the Global Market Intelligence (GMI) Production Project Database can read more information on the Iron Mesa plant and Corpus Christi fractionator.

Lashier said the company incorporated about $200 million of sustaining capital and $100 million of growth capital into the 2026 budget following the full acquisition of the 365,000-barrel-per-day (BBL/d) Wood River, Illinois refinery and the 146,000-BBL/d Borger, Texas refinery by purchasing the remaining 50% in WRB Refining LP.

For more information on WRB Refining and the company's third-quarter earnings, see October 30, 2025, article - P66 Refinery Profit Takes a Hit Amid West Coast Market Squeeze.

The Refining segment features $590 million for sustaining capital and $520 million for growth projects.

The growth capital includes work at the 245,000-BBL/d Humber Refinery in the U.K., as part of a multi-year investment "that will enable production of higher-quality gasoline, facilitating greater access to higher-value global markets." Startup is targeted for the second quarter of 2027.

Subscribers can see a list of related projects.

Capital also will go toward more than 100 "low-capital, high-return projects to improve market capture focused on crude flexibility, feedstock optimization and clean product yield improvements."

Subscribers can see a full list of active and planned projects worldwide from Phillips 66, which includes $122 million worth of maintenance projects that are expected to take place next year.

Joint Venture Chemical Spending not Included in Budget

Not included in the 2026 capital budget is spend attributed to Chevron Phillips Chemical Company LLC (CPChem) (The Woodlands, Texas), Phillips 66's chemicals joint venture with Chevron Corporation (Houston, Texas).

Phillips 66 said its portion of the joint venture capital spending is expected to total $680 million, including $480 million for growth projects, and will be self-funded.

CPChem's growth capital will go toward construction of two world-scale petrochemical facilities, one on the U.S. Gulf Coast and the other in Ras Laffan, Qatar. The facilities are expected to begin operating in 2026 and early 2027, respectively.

Subscribers to the GMI Chemical Processing Project Database can read more information on the U.S. Gulf Coast and Qatar projects.

Phillips 66's latest spending plan comes as global refining capacity growth is slowing, in addition to demand, and more refineries are adopting petrochemical units in place of gasoline production. For more information, see December 17, 2025, article - As Global Refining Slows, Producers Look to Petrochemicals.

Key Takeaways

• $2.4 billion: Phillips 66's 2026 capital budget.
• Compares with 2025's forecast of $2.1 billion.
• The 2026 budget includes NGLs and high-return refining projects.

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