Phillips 66 has introduced a brand new challenge to construct a pure fuel processing plant with a capability of 300 million cubic ft a day (MMcfd) within the Permian Basin.
Anticipated to start out operation within the first quarter (Q1) of 2027, the Iron Mesa fuel plant will serve Delaware and Midland Basin manufacturing, the Houston, Texas-based midstream and downstream participant stated because it introduced Q1 2025 outcomes.
“The acquisition of EPIC NGL earlier this month, and at present’s announcement that we’re setting up a brand new fuel plant within the Permian, furthers our built-in NGL [natural gas liquids] wellhead-to-market technique, offering secure money circulate in unsure market environments, enabling us to constantly return over 50 % of web working money circulate to shareholders”, stated chair and chief govt Mark Lashier.
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On April 1 Phillips 66 stated it had accomplished the acquisition of EPIC Y-Grade GP LLC and EPIC Y-Grade LP for about $2.2 billion, rising its midstream presence within the Permian Basin.
The models, purchased from EPIC Midstream Holdings LP, personal NGL pipelines, fractionation services and distribution techniques.
The acquired operations comprise two fractionators with a capability of170,000 barrels per day (bpd) close to Corpus Christi, Texas; about 350 miles of purity distribution pipelines; and an NGL pipeline round 885 miles lengthy and with a capability of 175,000 bpd. The NGL pipeline hyperlinks the Delaware, Midland and Eagle Ford basins to the fractionation complexes and Phillips 66’s Sweeny Hub.
The pipeline capability is being raised to 225,000 bpd, in a challenge anticipated to be accomplished Q2. An additional enlargement has additionally been sanctioned to develop the capability to 350,000 bpd; completion is anticipated 2026. EPIC had additionally put in place plans to boost the fractionation capability to 280,000 bpd.
“The acquired property join Permian manufacturing to Gulf Coast refiners, petrochemical firms and export markets, and are extremely built-in with the Phillips 66 asset base”, Phillips 66 stated.
For Q1 2025 it reported $487 million in web revenue however had an adjusted results of damaging $368 million, translating to losses per share of $0.9.
Outcomes have been impacted by a $246 million pre-tax accelerated depreciation on the Los Angeles refinery. In October 2024 the corporate stated it could stop manufacturing on the over-a-century-old refinery by the tip of 2025; Lashier cited uncertainty from “market dynamics” for the choice, amid regulatory strain in Democrat-led California.
Phillips 66 recorded a realized refining margin of $6.81 a barrel for Q1 2025, up from $6.08 for the prior quarter however down from $10.91 for Q1 2024.
“Our outcomes mirror not solely a difficult macro setting, but additionally the impression from one among our largest-ever spring turnaround packages, managed safely, on time and beneath funds”, Lashier stated. “Our property, not impacted by deliberate upkeep, ran effectively.
“With the majority of our turnarounds behind us, we’re effectively positioned to seize stronger margins because the yr unfolds”.
Nonetheless Phillips 66 is bracing for a battle with dissatisfied investor Elliott Funding Administration LP when shareholders collect for the corporate’s annual assembly Might 21. Elliott has known as for portfolio simplification, an operational overview and stronger oversight, blaming Phillip 66’s present construction and management for “persistent underperformance”.
Q1 2025 adjusted earnings earlier than curiosity, taxes, depreciation and amortization (EBITDA) landed at $736 million, down from $1.13 billion for This fall 2024. Adjusted EBITDA from midstream operations, refining and renewable fuels decreased sequentially. Adjusted EBITDA from the chemical substances and advertising and marketing segments grew quarter-on-quarter.
Money circulate from operations got here at $187 million, in comparison with $1.2 billion for This fall 2024. Phillips 66 ended Q1 2025 with $1.49 billion in money and $18.8 billion in debt.
It distributed $716 million to shareholders within the quarter by way of dividends and buybacks. On April 21 Phillips 66 declared a quarterly dividend of $1.2 per share, up $0.05.
To contact the writer, e-mail jov.onsat@rigzone.com
