Benzinga | Dec 10, 2021 12:07PM EST

Phillips 66 Announces 2022 Capital Program Of $1.9B

Phillips 66 (NYSE:PSX) today announced its 2022 capital program of $1.9 billion. The plan includes $992 million for sustaining capital and $916 million for growth capital. Approximately 45% of growth capital supports lower-carbon opportunities.

"The 2022 capital program demonstrates our commitment to disciplined capital allocation," said Greg Garland, Chairman and CEO of Phillips 66. "Our plan for sustaining capital reflects our ongoing focus on operating excellence to ensure the safety and reliability of our operations. We are also investing in returns-focused growth opportunities, including projects that will help us advance a lower-carbon future. In addition to a disciplined capital program, we will continue to prioritize debt reduction and returns to shareholders."

The Midstream capital plan of $703 million, which includes Phillips 66 Partners, comprises $426 million for growth projects and $277 million for sustaining projects. Growth capital will be directed toward completing construction of Sweeny Frac 4 and repayment of our 25% share of the Bakken Pipeline joint venture's debt due in 2022. Midstream growth capital also includes Emerging Energy opportunities to advance the company's lower-carbon efforts.

In Refining, Phillips 66 plans to invest $896 million, with $488 million for reliability, safety and environmental projects. Refining growth capital of $408 million is primarily for the reconfiguration of the San Francisco Refinery in Rodeo, California, as part of the Rodeo Renewed project. Upon expected completion in early 2024, the facility will initially have over 50,000 barrels per day, or 800 million gallons per year, of renewable fuel production capacity, making it one of the world's largest facilities of its kind. The conversion will reduce emissions from the facility and produce lower-carbon transportation fuels. Refining growth capital will also support opportunities for high-return, low-capital projects.

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 projects.

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

CPChem's growth capital will fund expansion of its normal alpha olefins production, optimization and debottleneck opportunities in the olefins and polyolefins chains, as well as continuing development of world-scale petrochemicals projects in the U.S. Gulf Coast and Qatar.

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 for these large ventures, the company's total 2022 capital program is projected to be $3.0 billion.

Millions of Dollars

Sustaining Growth Capital

Capital Capital Program

Capital Program

Midstream1 $ 277 426 703

Chemicals - - -

Refining2 488 408 896

Marketing and Specialties 62 82 144

Corporate and Other2 165 - 165

Phillips 66 Consolidated 992 916 1,908



DCP Midstream 65 63 128

CPChem 215 502 717

WRB 109 111 220

Selected Equity Affiliates 389 676 1,065



Total Capital Program $ 1,381 1,592 2,973

1) Includes $2 million of capital expected to be cash funded by joint venturepartners.

2) Excludes non-cash finance leases of $13 million in Refining and $9million in Corporate and Other.