Phillips 66 sets $1.9 billion capital spending budget for 2022

Phillips 66 has budgeted $1.9 billion for its capital spending budget in 2022, with about 45% of the $916 million growth capital to be used for lower-carbon opportunities, the company said in a Dec. 10 statement.

Sustaining capital spending for 2022 is $992 million and will be used for maintaining "operating excellence to ensure safety and reliability of our operations," CEO Greg Garland said in the statement.

For its refining segment, Phillips 66 will spend $896 million, with $488 million going for reliability, safety and environmental projects. The majority of the $408 million set aside for growth capital will go towards the Rodeo Renewed project – the reconfiguration of its California Bay Area refinery into a renewable fuels facility.

When online in 2024, the facility will be able to make 50,000 b/d or 800 million gallons/year of lower-carbon renewable diesel.

Capital spending for WRB – Phillips 66's joint venture with Cenovus which includes the Borger, Texas, refinery and the refinery in Wood River, Illinois – will be sustaining capital used to increase crude flexibility and clean product output.

Phillips 66 also plans in 2022 to convert its Alliance refinery in Belle Chasse, Louisiana, to a terminal after the plant sustained severe damage from Hurricane Ida.

Including spending for Phillips 66 Partners, Phillips 66 plans 2022 midstream spending of $703 million, with $426 million of growth capital going to finish the Sweeny Frac 4 fractionator and repay its 25% share of debt due on the Bakken Pipeline.

On Oct. 27, Phillips 66 became sole owner of its master limited partnership, Phillips 66 Partners, by acquiring all units not already held, thus rolling its operations into those of the parent company. The transaction is expected to close Q1 22.

Projects under the umbrella of Phillips 66's Emerging Energy Unit created earlier this year will be funded from the midstream to "advance the company's lower-carbon efforts."

Phillips 66 and Plug Power in October announced plans for a joint venture to advance the use of green hydrogen – or hydrogen made from renewable from sources – as a transportation fuel.