09-12-2022

Phillips 66 announces 2023 capital program

Phillips 66 today announced a 2023 capital program of $2 billion, including $865 million for sustaining capital and $1.1 billion for growth capital. Approximately 50% of growth capital supports lower-carbon opportunities. The capital program is consistent with the company’s commitment to maintain a $2 billion annual budget through 2024.

“The 2023 capital program reflects our ongoing commitment to capital discipline,” said Mark Lashier, President and CEO of Phillips 66. “Through our Business Transformation, we are capturing $200 million of sustaining capital efficiencies while prioritizing safety and reliability. We are also investing in returns-focused growth opportunities, including enhancing our NGL platform and converting our Rodeo facility to produce lower-carbon renewable fuels.

“Additionally, the capital program supports our commitment to return $10 billion to $12 billion to shareholders between the second half of 2022 and the end of 2024 through a secure, competitive and growing dividend and share repurchases.”

The Midstream capital plan of $639 million comprises $329 million for sustaining projects and $310 million for growth projects. Growth capital will be directed toward enhancing the company’s integrated NGL value chain from wellhead to market. The Midstream expected spend includes 100 percent of DCP Midstream, LP’s sustaining capital of $150 million and $125 million of growth capital.

In Refining, Phillips 66 plans to invest $1.1 billion, including $389 million for reliability, safety and environmental projects. Refining growth capital of $729 million includes the continuing conversion of the San Francisco Refinery in Rodeo, California, into one of the world’s largest renewable fuels facilities. The conversion will reduce emissions from the facility and produce lower carbon-intensity transportation fuels. Refining growth capital will also support opportunities for high-return, low-capital projects to improve asset reliability and market capture.

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 and information technology projects.

Phillips 66’s proportionate share of capital spending by joint ventures Chevron Phillips Chemical Company LLC (CPChem) and WRB Refining LP (WRB) is expected to total $1.1 billion and be self-funded.

CPChem’s growth capital will fund construction of an integrated polymers facility on the U.S. Gulf Coast. The facility, expected to begin operations in 2026, will include a 4,600 million pounds per year ethane cracker and two 2,200 million pounds per year high-density polyethylene units. CPChem continues expansion of its propylene splitting capacity and normal alpha olefins production, as well as other optimization and debottleneck opportunities. In addition, CPChem will continue development of a world-scale petrochemical project in Ras Laffan, Qatar, with a final investment decision expected in early 2023.

WRB’s capital spending will be directed to sustaining projects, crude flexibility and enhancing clean product yield.

Including Phillips 66’s proportionate share of capital spending associated with joint ventures CPChem and WRB, the company’s total 2023 capital program is projected to be $3.1 billion.