Phillips 66 Approves Funding for Two Midstream Projects in Southeast Texas - $3 Billion

February 18, 2014 Kirk Eggleston

Funding for two Southeast Texas midstream projects was approved in early February 2014 by Phillips 66's board of directors. Costs for the construction of a fractionator in Old Ocean, TX, announced in August of 2013, and a liquefied petroleum gas export terminal in Freeport, TX, are an estimated $3 billion combined.

According to Phillip's 66, the projects will create more than 50 full-time jobs and over 1,000 temporary construction jobs.

“It’s an extraordinary time of opportunity for our company and our industry, especially in the rapidly growing midstream space,” said Tim Taylor, executive vice president, Phillips 66 Commercial, Marketing, Transportation and Business Development. “Given the anticipated growth in natural gas liquids production, we see substantial advantages in having fractionation and export facilities on the Gulf Coast outside of Mont Belvieu. These projects allow us to maximize our existing infrastructure and will position us for further growth.”

Fractionator Located Close to Sweeny, TX Refinery

The "Sweeny Fractionator One" will be located close to the company’s Sweeny Refinery, and will supply purity natural gas liquids (NGL) products to the petrochemical industry and heating markets. Y-grade (mixed NGL) supply to the fractionator will come from nearby major pipelines, including the recently completed Sand Hills Pipeline.

The 100,000 bbls per day NGL fractionator is expected to be completed and online in the third quarter of 2015.

Liquefied Petroleum Gas Export Terminal in Freeport, TX

The "Freeport LPG Export Terminal" will be located at the company’s existing marine terminal in Freeport, Texas, and will allow growth for Phillips 66's midstream, transportation and storage infrastructure on a global scale. According to the company estimates, the terminal will have an initial export capacity of 4.4 million bbls per month, with a ship loading rate of 36,000 bbls per hour. The export terminal is expected to come online in mid-2016.

Fractionators are used to separate a raw NGL stream into its various components (ethane, butane, propane, etc.)

Freeport LNG Looking For Financing - Planning Gas Exports

June 28, 2013 R.T. Dukes

Freeport LNG is looking to raise more than $7.5 billion to begin construction at its proposed LNG export facility in Freeport, TX.

The Energy Department has approved 1.4 Bcfd in exports at the site and the company is seeking approval for an additional 1.4 Bcfd. The facility still needs FERC approval and expects to know more in 2014. If everything goes as planned, one export train a year will come online starting in 2017.

The Freeport LNG facility has agreements to export gas for Osaka Gas, Chubu Electric Power, and BP.

Cheniere Energy is the only LNG export facility to receive full approval to export US natural gas. The Cheniere facility is located at Sabine Pass and construction started in August of 2012.

Production continues to grow in what are historically consuming areas like the Marcellus Shale. If production continues to grow in the Northeast, exports will be a welcomed market for Eagle Ford gas. Exports might even be needed to support any significant amount of natural gas development.

Dow Chemical's Propylene Plant Gets Approval - Eagle Ford Feedstock

March 8, 2012 R.T. Dukes

Dow Chemical's board has authorized the company to finalize the engineering plans and to begin purchasing equipment for a "world-scale" propylene plant near the company's Freeport Complex in Texas. You can read more about why a new petrochemical plant makes sense in a recent article published here - Eagle Ford NGLs Adding to U.S. Supply Growth. The announcement is a big step in what is really becoming a petrochemicals renaissance in our country. It was just a few years ago that industry experts thought there would never be another pet-chem plant built in the U.S., but that was before the shale plays really burst onto the scene. The Eagle Ford, along with many others, have changed the cost of doing business in our country. That's a big win and this is why:

Dow expects the new facility will:

Create 1,300 jobs at the height of construction
40 contractors and 80 new Dow employees will be needed to maintain & operate the facilities

This is the perfect example of what domestic energy can do for the economy. This plant would have been undoubtedly built in a different region of the world before shales began adding low cost oil & gas supply. It's also why measuring the direct impact of a play like the Eagle Ford is difficult. Do you consider the jobs created by the Dow plant as Eagle Ford Jobs? I doubt many will, but I can guarantee this plant would have been far less likely without it.

“The availability of cost-advantaged feedstocks from U.S. shale gas developments represents a value-creating opportunity for our downstream businesses, and Dow is capitalizing on this,” said Brian Ames, vice president of Olefins, Aromatics and Alternatives. “Our Company was among the first in our industry to declare a comprehensive plan to take advantage of the increasing supplies of U.S. natural gas liquids, and we remain on track to implement that plan, which will create thousands of domestic jobs.”

Read the entire press release at dow.com