Phillips 66 Earmarks 2017 Capex for Big Project Completions

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Researched by Industrial Info Resources (Sugar Land, Texas)--Phillips 66 (NYSE:PSX) (Houston, Texas) is planning some key refining, oil & gas pipeline and chemical processing project completions next year. The company recently announced a $3.85 billion capital program for 2017, which includes $2.4 billion for growth projects.

Phillips 66 said it plans to invest $1.5 billion in its midstream natural gas liquids (NGL) and transportation businesses, with 85% of that amount for growth projects. Among other things, it said it is targeting continued expansion of its Beaumont Terminal in Texas. Phillips plans to build four additional tanks at its Beaumont Terminal next year, with a total investment value of $15 million. For more on this project, see Industrial Info's project report.

Phillips 66 plans $905 million of capital expenditures and investments in its Refining segment, with 65% of that amount for reliability, safety and environmental projects. Growth capital includes a project at the Billings, Montana, refinery to increase heavy crude processing capabilities. The refinery's $110 million vacuum unit replacement project, which is expected to be completed in second-quarter 2017, involves replacing the existing 25,000-barrel-per-day (BBL/d) vacuum unit with a 35,000 BBL/d unit to recover a larger proportion of gasoline and diesel products. For more on this project, see Industrial Info's project report.

The company is earmarking $675 million in capital expenditures next year for Chevron Phillips Chemical Company LLC (The Woodlands, Texas), Phillips 66's joint venture with Chevron Corporation (NYSE:CVX) (San Ramon, California). The funding will be used for the completion of Chevron Phillips' 3.3 billion-pound-per-year ethane cracker in Baytown, Texas. For more information on this project, see Industrial Info's project report. The funding will also support next year's planned completion and start-up of two 1.1 billion-pound-per-year polyethylene facilities, both located at the company's Sweeny site at Old Ocean, Texas. These facilities will increase Chevron Phillips' global ethylene and polyethylene capacity by about one-third, according to the company.

Earlier this month, Phillips 66 announced its LPG (liquefied petroleum gas) Freeport, Texas, export terminal was fully operational. The terminal, which was completed in November, can simultaneously load two ships with refrigerated propane and butane at a combined rate of 36,000 barrels per hour. Chief Executive Officer Greg Garland said in a press statement that the startup of the terminal "is the culmination of a four-year effort to develop a new U.S. Gulf Coast natural gas liquids (NGL) market hub that also includes Phillips 66 Partners' 100,000-barrel-per-day Sweeny fractionator and 7.5 million barrel Clemens storage facility." The $1 billion project kicked off in 2014.

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