Commitment to Disciplined Capital
Allocation
Phillips 66 (NYSE: PSX), an energy manufacturing and logistics
company, announces its 2018 capital budget of $2.3 billion, which
includes $1.4 billion of growth capital and $0.9 billion of
sustaining capital.
“The 2018 capital program demonstrates our commitment to
disciplined capital allocation and operating excellence,” said
chairman and CEO Greg Garland. “We continue to make sustaining
capital investments to maintain the integrity of our assets and
ensure safe, reliable and environmentally responsible operations.
Our growth budget promotes value through investment in capital
projects offering attractive returns. Long-term, we continue to
target re-investing 60 percent of our cash flow back into the
business and returning 40 percent to our shareholders.”
In Midstream, Phillips 66 plans to invest $1.2 billion,
including $1.0 billion of growth capital, in its Natural Gas
Liquids (NGL) and Transportation businesses. The company is
developing growth projects integrated with its existing assets and
infrastructure, such as ongoing expansion of the Beaumont Terminal,
additional Gulf Coast fractionation capacity, and investment in
pipelines and other terminals.
Midstream capital includes budgeted spending of $595 million by
Phillips 66 Partners, with $85 million directed toward maintenance.
Growth capital at the partnership will support organic projects,
such as the Sand Hills Pipeline expansion, completion of the Bayou
Bridge Pipeline eastern segment, and an isomerization unit at the
Phillips 66 Lake Charles Refinery.
Phillips 66 plans $827 million of capital spending in Refining,
with $541 million for reliability, safety and environmental
projects. Refining growth capital of $286 million is for small,
high-return, quick payout projects primarily to increase clean
product yields. Projects include completion of the fluid catalytic
cracking (FCC) unit modernization at the Bayway Refinery and FCC
optimization at the Sweeny Refinery.
In Marketing and Specialties, the company intends to invest $140
million of growth and sustaining capital. The growth investment
will further increase retail sites in Europe.
In Corporate and Other, the company plans to fund $116 million
in projects, primarily related to information technology and
facilities.
Phillips 66’s proportionate share of capital spending by joint
ventures Chevron Phillips Chemical Company LLC (CPChem), DCP
Midstream, LLC (DCP Midstream) and WRB Refining LP (WRB) is
expected to be $946 million. Including these equity affiliates, the
company’s total 2018 capital program is projected to be $3.2
billion.
In Chemicals, Phillips 66’s share of CPChem’s 2018 capital
expenditures is expected to be $398 million, a decrease of about 45
percent from 2017 due to completion of the U.S. Gulf Coast
Petrochemicals Project. The new polyethylene units included in this
project started up during the third quarter of 2017, while
commissioning of the ethane cracker at the Cedar Bayou facility is
expected to begin in the first quarter of 2018. Phillips 66’s
expected share of DCP Midstream’s 2018 capital spending is $405
million, with $350 million targeted for growth projects including
the Sand Hills Pipeline expansion and two DJ Basin gas processing
plants. The company’s expected share of WRB’s capital expenditures
is $143 million, and includes completion of the Wood River Refinery
FCC unit modernization to increase clean product yield. Capital
spending by these three major joint ventures is expected to be
self-funded.
Millions of
Dollars Sustaining
Capital
Growth
Capital
Capital
Program
Midstream Phillips 66 $ 133 490 623 Phillips
66 Partners 85
510 595 218 1,000 1,218 Chemicals - - -
Refining 541 286 827 Marketing and Specialties 65 75 140 Corporate
and Other 116
- 116
Phillips 66 Consolidated
940
1,361 2,301 DCP 55 350 405
CPChem 247 151 398 WRB 77
66 143
Selected Equity
Affiliates 379
567 946 Total
Capital Program $
1,319 1,928 3,247
About Phillips 66
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.
Phillips 66 Partners, the company's master limited partnership, is
an integral asset in the portfolio. Headquartered in Houston, the
company has 14,600 employees committed to safety and operating
excellence. Phillips 66 had $53 billion of assets as of Sept. 30,
2017. For more information, visit www.phillips66.com or follow us
on Twitter @Phillips66Co.
CAUTIONARY STATEMENT FOR THE PURPOSES OF THE
"SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995
This news release contains certain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, which are intended to be covered by the safe harbors
created thereby. Words and phrases such as “is anticipated,” “is
estimated,” “is expected,” “is planned,” “is scheduled,” “is
targeted,” “believes,” “continues,” “intends,” “will,” “would,”
“objectives,” “goals,” “projects,” “efforts,” “strategies” and
similar expressions are used to identify such forward-looking
statements. However, the absence of these words does not mean that
a statement is not forward-looking. Forward-looking statements
relating to Phillips 66’s operations (including joint venture
operations) are based on management’s expectations, estimates and
projections about the company, its interests and the energy
industry in general on the date this news release was prepared.
These statements are not guarantees of future performance and
involve certain risks, uncertainties and assumptions that are
difficult to predict. Therefore, actual outcomes and results may
differ materially from what is expressed or forecast in such
forward-looking statements. Factors that could cause actual results
or events to differ materially from those described in the
forward-looking statements include fluctuations in NGL, crude oil,
and natural gas prices, and petrochemical and refining margins;
unexpected changes in costs for constructing, modifying or
operating our facilities; unexpected difficulties in manufacturing,
refining or transporting our products; lack of, or disruptions in,
adequate and reliable transportation for our NGL, crude oil,
natural gas, and refined products; potential liability from
litigation or for remedial actions, including removal and
reclamation obligations under environmental regulations; limited
access to capital or significantly higher cost of capital related
to illiquidity or uncertainty in the domestic or international
financial markets; and other economic, business, competitive and/or
regulatory factors affecting Phillips 66’s businesses generally as
set forth in our filings with the Securities and Exchange
Commission. Phillips 66 is under no obligation (and expressly
disclaims any such obligation) to update or alter its
forward-looking statements, whether as a result of new information,
future events or otherwise.
The disaggregation of capital spending between sustaining and
growth is not a distinction recognized under generally accepted
accounting principles in the United States. The company provides
such disaggregated information to demonstrate management’s return
expectations with respect to capital spending.
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version on businesswire.com: http://www.businesswire.com/news/home/20171208005517/en/
Phillips 66Jeff Dietert, 832-765-2297
(investors)jeff.dietert@p66.comorRosy Zuklic, 832-765-2297
(investors)rosy.zuklic@p66.comorDennis Nuss, 832-765-1850
(media)dennis.h.nuss@p66.com
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