Phillips 66 Announces 2024 Capital Program

Source Company Press Release
Company Phillips 66
Tags Corporate: Guidance, Overview/Strategy, Country: United States, Financial - Costs & Metrics: Capital Expenditures
Date December 08, 2023

Phillips 66 (NYSE: PSX) today announced a 2024 capital budget of $2.2 billion, including $923 million for sustaining capital and $1.3 billion for growth capital. Excluding joint venture debt repayments due in 2024, the company’s 2024 capital budget is $2 billion.

“We continue to demonstrate capital discipline in support of our strategic priorities,” said Mark Lashier, president and CEO of Phillips 66. “The 2024 capital budget includes investing in our NGL wellhead-to-market value chain, completing the Rodeo renewable fuels facility and enhancing Refining performance. In addition, the capital budget is consistent with our plan to return $13 billion to $15 billion to shareholders by year-end 2024.”

Lashier added that the sustaining capital budget reflects $300 million of efficiencies as a result of the company’s business transformation efforts. Phillips 66’s historical average sustaining capital spend was approximately $1 billion per year prior to business transformation, and the consolidation of DCP Midstream adds approximately $200 million in sustaining capital.

In Midstream, the capital budget of $985 million comprises $392 million for sustaining projects and $593 million for growth projects focused on enhancing the company’s integrated NGL wellhead-to-market value chain. In addition, growth capital includes $250 million related to the repayment of the company’s 25% share of the Bakken Pipeline joint venture’s debt due in 2024.

Phillips 66 plans to invest $1.1 billion in Refining, including $412 million for sustaining capital. Refining growth capital of $654 million includes completing the conversion of the San Francisco Refinery in Rodeo, California, into one of the world’s largest renewable fuels facilities. Startup of the converted facility is expected in the first quarter of 2024. The conversion will reduce emissions from the facility and allow for the production of lower carbon-intensity transportation fuels. Refining growth capital will also support high-return, low-capital projects to enhance market capture.

The Marketing and Specialties capital budget reflects continued enhancement of the company’s retail network, including energy transition opportunities.

Corporate and Other capital will primarily fund 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 billion and be self-funded.

CPChem’s growth capital will fund the construction of world-scale petrochemical facilities on the U.S. Gulf Coast and in Ras Laffan, Qatar, through joint ventures. The facilities have project financing in place and are expected to start up in 2026.

WRB’s capital spending will be directed to sustaining projects and enhancing market capture.

Including Phillips 66’s proportionate share of capital spending associated with joint ventures CPChem and WRB, the company’s total 2024 capital program is projected to be $3.2 billion.

    Millions of Dollars 
    Sustaining    Growth    Capital 
    Capital    Capital    Program 
Capital Program             
Midstream1    392    593    985 
Chemicals         
Refining      412    654    1,066 
Marketing and Specialties      51    61    112 
Corporate and Other      68      68 
Phillips 66 Consolidated      923    1,308    2,231 
             
CPChem      245    583    828 
WRB      114    69    183 
Selected Equity Affiliates      359    652    1,011 
             
Total Capital Program    1,282    1,960    3,242 
 
1) Midstream growth capital includes $250 million related to the repayment of the company’s 25% share of the Bakken Pipeline joint venture’s debt due in 2024. 

Source: EvaluateEnergy® ©2024 EvaluateEnergy Ltd