Phillips 66 Co. is progressing with its program of enhancing performance and integrated growth of its midstream business via a combination of recently completed and future works, including a newly announced plan to expand natural gas processing capacity in the Permian basin.
As part of its NGL wellhead-to-market strategy, Phillips 66 has taken final investment decision (FID) to build the new 300-MMcfd Iron Mesa gas processing plant near the company’s existing 160-MMcfd gas plant in Goldsmith, Ector County, Tex., about 15 miles northwest of Odessa, the operator said in its first-quarter 2025 earnings call on Apr. 25.
Given the Phillips 66’s NGL pipeline system in the region, the new plant’s location will allow for gathering and processing of feedstock from both the Midland and Delaware basins of the Permian, as well as enable improvements to the Goldsmith plant that will include retiring portions of the existing plant and upgrading its processing performance, according to Don Baldridge, Phillips 66’s executive vice-president of midstream and chemicals.
Addition of Iron Mesa—which is scheduled for startup during first-quarter 2027—and upgrades at Goldsmith will result in enhanced operational efficiencies and reliability to improve Phillip 66’s overall cost structure in the region, Baldridge said.
While the company did not reveal specifics regarding its proposed investment amount for the new plant, Mark Lasher—Phillip 66’s chief executive officer—said Iron Mesa would be funded within the operator’s existing budget.
Announcement of the new gas plant came alongside the operator’s confirmation that it is on track to commission a second natural gas processing plant at the Dos Picos gas gathering system and processing complex in Midland County, Tex., as part of an expansion of the operator’s Midland basin operations (OGJ Online, Jan. 27, 2025; July 11, 2023).
“Our Dos Picos II expansion plant, which was part of our [Pinnacle Midland Parent LLC] acquisition strategy, is expected to come online in the third quarter of 2025,” Lasher said during the earnings call.
Previously scheduled to reach startup and full commercial operation during 2024, the new 220-MMcfd Dos Picos II plant will join the existing 220-MMcfd plant for an overall 440-MMcfd gas processing capacity at the site.
Phillips 66 completed its purchase of Pinnacle midstream assets in 2024 (OGJ Online, May 20, 2024).
