Phillips 66 said Monday it expects a $2.4 billion budget for next year, consisting of $1.1 billion in sustaining capital and $1.3 billion in growth capital.
“The 2026 capital budget reflects our ongoing commitment to capital discipline and maximizing shareholder returns”, chair and chief executive Mark Lashier said in an online statement. “We are investing growth capital in our NGL value chain and high-return refining projects, while also investing sustaining capital to support safe and reliable operations”.
Houston, Texas-based Phillips 66 expects to shell out $1.1 billion into its refining business, comprising $590 million in sustaining capital and $520 million into growth projects.
“With the consolidation of WRB Refining, we incorporated approximately $200 million of sustaining capital and $100 million of growth capital into the budget”, Lashier said.
Phillips 66 recently acquired an additional 50 percent stake in WRB Refining LP from Cenovus Energy Inc for $1.4 billion, fully taking over the Wood River and Borger refineries, as confirmed by Phillips 66 in its third quarter report October 29. Wood River in Roxana, Illinois, has a gasoline and distillates production capacity of 176,000 bpd and 140,000 bpd respectively. Borger in Borger, Texas, produces up to 100,000 bpd of gasoline and 70,000 bpd of distillates, according to Phillips 66.
The refining allotment for 2026 also includes a multiyear investment at the Humber refinery to enable the production of higher-quality gasoline and expand the facility’s access to “higher-value global markets”, the company said. Phillips 66 expects to start up the project in the second quarter of 2027. Located in North Lincolnshire on the English east coast, the Humber site produces up to 95,000 barrels per day (bpd) of gasoline and 115,000 bpd of distillates, according to Phillips 66.
The refining budget also includes “over 100 low-capital, high-return projects to improve market capture focused on crude flexibility, feedstock optimization and clean product yield improvements”, it said.
In its midstream segment, Phillips 66 has also allocated $1.1 billion for next year, comprising $400 million in sustaining capital and $700 million in growth capital.
Growth projects under the midstream budget include the Iron Mesa gas processing plant in the United States Permian Basin. With a planned capacity of 300 million cubic feet a day, the plant is expected to start up in the first quarter of 2027.
Also included is a project to expand a natural gas liquids pipeline it acquired earlier this year from EPIC. Expected to be completed by yearend 2026, the project will increase capacity from 225,000 bpd to 350,000 bpd and grow connectivity between producers in the Permian and Eagle Ford basins and fractionators in Corpus Christi and Sweeny.
In Corpus Christi, Phillips 66 plans to build a 100,000-bpd fractionation facility. It expects to make a final investment decision 2026 and start up the project 2028.
Meanwhile in its joint venture Chevron Phillips Chemical Co LLC, Phillips 66 projects $680 million in capital spending next year. That would comprise $200 million in sustaining capital and $480 million in growth capital.
“CPChem’s growth capital will continue to fund the construction of world-scale petrochemical facilities through joint ventures on the U.S. Gulf Coast and in Ras Laffan, Qatar. The facilities are expected to start up in 2026 and early 2027, respectively”, Phillips 66 said.
To contact the author, email jov.onsat@rigzone.com
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