An integrated energy manufacturing and logistics company, Phillips 66 (PSX), has received the consent from its board of directors to proceed with its twin projects. These are namely, Sweeny Fractionator One and Freeport Liquefied Petroleum Gas (LPG) Export Terminal.
Both the projects form part of the company’s Midstream growth program and are projected to warrant an investment of over $3 billion.
Located in Old Ocean, Texas, close to the company’s Sweeny Refinery, the Sweeny Fractionator One will provide purity natural gas liquids (NGL) products to the petrochemical industry and heating markets. The 100,000 barrel-per-day NGL fractionator will receive supply of Y-grade (mixed NGL) from nearby major pipelines, including the recently completed Sand Hills Pipeline in which Phillips 66 owns a direct 33.3% interest. The fractionator is schedule to come online in the third quarter of 2015.
The Freeport LPG Export Terminal will share its location with the company’s existing marine terminal in Freeport, Texas. The project will leverage Phillips 66 midstream, transportation and storage infrastructure to deliver petrochemical, heating and transportation markets worldwide.
Initially, the terminal will have an export capacity of 4.4 million barrels per month, which is equivalent to eight very large gas carriers, with a ship loading rate of 36,000 barrels per hour. The terminal is estimated to begin operations in mid 2016.
Both these projects will be equipped with NGL storage and additional pipelines as well as include a 100,000 barrel-per-day de-ethanizer unit near the Sweeny Refinery to upgrade domestic propane for export. The projects will be well connected to market hubs in Mont Belvieu, Texas.
The projects are in varying stages of development. For the Sweeny Fractionator One, the site is being prepared, order for critical equipment has been placed and expansion of supporting infrastructure has begun. The company continues to work with the relevant agencies to secure required permits for the Freeport LPG Export Terminal, and its construction awaits the approval of all permits.
Phillips 66 carries a Zacks Rank #3 (Hold). However, there are stocks in the oil and gas sector – Helmerich & Payne, Inc. (HP), Swift Energy Co. (SFY) and Cabot Oil & Gas Corporation (COG) – which hold a Zacks Rank #1 (Strong Buy) and are expected to perform better.
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