Phillips 66 announced Dec. 14 a $2.89 billion capital spending program for 2019, consisting of $1.88 billion of growth capital and $1.01 billion of sustaining capital.
The company plans to direct more than half of its capital budget to its midstream businesses, with $847 million funding growth capital projects at its midstream segment, $523 million funding growth capital projects at its Phillips 66 Partners LP master limited partnership subsidiary and a total of $263 million funding sustaining capital projects at both.
The $1.63 billion midstream capital budget reflects expected joint venture-level financing to fund a portion of the construction of the 400,000-barrel-per-day Gray Oak Pipeline. It also includes 300,000 bbl/d of additional fractionation capacity at the Sweeny Hub, the ongoing expansion of the Beaumont Terminal, South Texas Gateway terminal, Clemens Caverns expansion, an isomerization unit at the Phillips 66 Lake Charles refinery and the Lake Charles products pipeline.
"We are building out our integrated midstream infrastructure network, including pipelines, export facilities and fractionation in support of growing hydrocarbon production in the key domestic shale plays," Phillips 66 Chairman and CEO Greg Garland said. "Disciplined capital allocation is a top priority for us, and we continue to have a long-term objective to reinvest 60% of our cash flow into the business and return 40% to our shareholders through dividends and buybacks."
Phillips 66 is directing $923 million toward its refining segment, with $512 million set aside for reliability, safety and environmental projects, and $411 million toward projects that will enhance yield of higher-value products, including an upgrade of the fluid catalytic cracking unit at the Sweeny refinery.
At its marketing and specialties segment, Phillips 66 plans total capex of $161 million to grow its retail presence in Europe.
Phillips 66 expects its share of capex at equity affiliates, including DCP Midstream LLC, Chevron Phillips Chemical Co. and WRB Refining LP, to total $1.24 billion, with 67% funding growth projects, to bring the company's total capital spend to $4.14 billion.
The company expects its share of DCP Midstream, CPChem and WRB Refining capex to total $505 million, $572 million and $165 million, respectively.