MOSCOW (MRC) -- Phillips 66 has announced its 2022 capital program of USD1.9 B. The plan includes USD992 MM for sustaining capital and USD916 MM for growth capital, according to Hydrocarbonprocessing.
Approximately 45% of growth capital supports lower-carbon opportunities.
“The 2022 capital program demonstrates our commitment to disciplined capital allocation,” said Greg Garland, Chairman and CEO of Phillips 66. “Our plan for sustaining capital reflects our ongoing focus on operating excellence to ensure the safety and reliability of our operations. We are also investing in returns-focused growth opportunities, including projects that will help us advance a lower-carbon future. In addition to a disciplined capital program, we will continue to prioritize debt reduction and returns to shareholders.”
The Midstream capital plan of USD703 MM, which includes Phillips 66 Partners, comprises USD426 MM for growth projects and USD277 MM for sustaining projects. Growth capital will be directed toward completing construction of Sweeny Frac 4 and repayment of our 25% share of the Bakken Pipeline joint venture’s debt due in 2022. Midstream growth capital also includes Emerging Energy opportunities to advance the company’s lower-carbon efforts.
In refining, Phillips 66 plans to invest USD896 MM, with USD488 MM for reliability, safety and environmental projects. Refining growth capital of $408 MM is primarily for the reconfiguration of the San Francisco refinery in Rodeo, California, as part of the Rodeo Renewed project. Upon expected completion in early 2024, the facility will initially have over 50,000 bpd, or 800 MM gallons per year, of renewable fuel production capacity, making it one of the world’s largest facilities of its kind. The conversion will reduce emissions from the facility and produce lower-carbon transportation fuels. Refining growth capital will also support opportunities for high-return, low-capital projects.
The marketing and specialties capital plan reflects the continued development and enhancement of the company’s retail network, including energy transition opportunities. Corporate and other capital 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 total USD1.1 B and to be self-funded.
CPChem’s growth capital will fund expansion of its normal alpha olefins production, optimization 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.
As MRC informed earlier, US Refiner Phillips 66 said on 30 September it would cut greenhouse gas emissions by 30% from its operations by 2030, amid mounting pressure on the industry to join the fight against climate change and cut carbon emissions by mid-century.
We remind that US-based Phillips 66 remains open to developing another ethane cracker for its Chevron Phillips Chemical (CP Chem) joint venture, the refiner's CEO said in March 2018.
Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,047,100 tonnes in the first ten months of 2021, up by 17% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,226,530 tonnes in January-October 2021, up by 26% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding stat-copolymers of propylene (PP random copolymers) decreased significantly.
Phillips 66 is a diversified energy manufacturing and logistics company. With a portfolio of Midstream, Chemicals, Refining, and Marketing and Specialties businesses, the company processes, transports, stores and markets fuels and products globally. Headquartered in Houston, the company has 14,100 employees committed to safety and operating excellence. Phillips 66 had USD56 billion of assets as of Sept. 30, 2021.
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