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.)

Phillips 66 Plans Gulf Coast Fractionator

April 4, 2013 R.T. Dukes

Phillips 66 is planning to build a 100,000 b/d fractionator in Old Ocean, TX. The plant will alleviate congestion in Mont Belvieu and add an outlet for Y-grade NGLs from the Eagle Ford. The plant will be located near the company's Sweeney Refinery and will have access to Gulf Coast petrochemical customers and the Month Belvieu distribution network.

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

“This project would enable us to take advantage of strong existing midstream transportation and storage infrastructure along with demonstrated operations excellence,” said Phillips 66 Chairman and CEO Greg Garland. “We see excellent market-facing opportunities to grow the natural gas liquids business, and the chance to supply purity NGLs and liquefied petroleum gas to the petrochemical industry and heating markets.”

Phillips 66 is currently seeking interest from suppliers of Y-grade NGLs.

The plant will also create even more Texas oilfield jobs. Hundreds of construction workers will be needed and 25 full-time positions will be created to run the plant. Construction should begin in early 2014 and the plant should be in service in late 2015.

Phillips already owns fractionation capacity in the Gulf Coast, at Mont Belvieu, and in Conway, Kansas.

Chevron Phillips - Baytown Petchem Facility to be World's Largest

April 4, 2012 R.T. Dukes

Chevron Phillips announced the company is going forward with a major petro-chemical facility at the Cedar Bayou Chemical Complex in Baytown, TX. The new plant will be the world's largest on purpose 1-hexene plant and will be capable of producing 250,000,000 metric tons (551,000,000 lbs) per year. The announcement follows a release less than two weeks ago that the company will expand NGL fractionation, at the Sweeny Plant in Old Ocean, TX, to 116,000 b/d. An increase in capacity of 22,000 b/d or almost 20%.

Both developments are the direct result of growing feedstock supplies from liquids plays that produce significant volumes of NGLs. We discussed the reasoning behind new fractionation and petchem facilities in more detail in a previous article titled Eagle Ford NGLs Adding to U.S. Supply Growth.

1-hexene isn't in my normal vocabulary, but the company provided the following description.

The new 1-hexene unit at the Cedar Bayou facility will enjoy significant advantages in infrastructure, feedstock availability, and operational expertise. 1-hexene is a critical component used in the manufacture of polyethylene, a plastic resin commonly converted into film, pipe, detergent bottles, and food and beverage containers.

Construction on the petchem plant will begin soon, with a targeted completion date of early 2014. The fractionator expansion will be complete early in 2013.

Read the entire press release at cpchem.com