“Our 2021 capital budget is supported by our diversified portfolio, strong financial position and capital discipline,” said Greg Garland, chairman and CEO of Phillips 66. “We continue to focus on reducing capital expenditures as market conditions remain challenged. We are prioritising completion of in-progress projects, as well as advancing our investments in renewable fuels. Phillips 66 is committed to financial flexibility, enabled by our balance sheet and strong investment grade credit ratings. We continue to execute our strategy with a focus on disciplined capital allocation and long-term value creation for our shareholders, including a secure, competitive, growing dividend.”
In Midstream, the company plans to invest US$610 million, including US$300 million of Phillips 66 Partners adjusted capital spending. The budget is directed toward completing near-term committed and optimisation projects, focusing on pipeline operations and progressing construction of Sweeny Frac 4 and the C2G Pipeline. In addition, the Midstream budget includes sustaining capital to enhance asset integrity and reliability.
The Refining capital budget includes US$521 million of sustaining capital for reliability, safety and environmental projects. The Refining budget will also include US$255 million to fund high-return, quick-payout projects to enhance margins by improving clean product yields and reducing feedstock costs, as well as investments to competitively position the company for a lower carbon future. The Refining budget includes pre-construction engineering and design costs related to the company’s plans to reconfigure its San Francisco Refinery in Rodeo, California, to produce renewable fuels. Upon expected completion in early 2024, the facility would have over 50 000 bpd, or 800 million gallons per year, of renewable fuel production capacity, making it one of the world’s largest facilities of its kind. The conversion is expected to reduce the facility’s greenhouse gas emissions by 50% and help California meet its low carbon objectives.
The Corporate and Other capital budget will primarily fund digital transformation projects.
Phillips 66’s proportionate share of capital spending by joint ventures Chevron Phillips Chemical Company LLC (CPChem), WRB Refining LP (WRB) and DCP Midstream, LLC (DCP Midstream) is expected to be US$707 million. Capital spending by CPChem and DCP Midstream is expected to be self-funded.
CPChem’s growth capital will fund expansion of its normal alpha olefins production, optimisation and debottleneck opportunities in the olefins and polyolefins chains, as well as continuing development of world-scale petrochemicals projects in the US Gulf Coast and Qatar.
WRB’s capital spending will be directed to sustaining projects, crude flexibility and distillate yield enhancement.
Read the article online at: https://www.hydrocarbonengineering.com/refining/15122020/phillips-66-outlines-2021-capital-programme/
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