Phillips 66 is deferring its Red Oak and Liberty pipelines and its Sweeny Frac 4 project as part of reducing 2020 consolidated capital spending by $700 million to $3.1 billion. Phillips 66 also postponed making a final investment decision on its ACE Pipeline.
Phillips 66 in 2019 formed two separate 50-50 joint ventures to build Red Oak and Liberty. The company and Bridger Pipeline LLC formed Liberty Pipeline LLC to build the 24-in. OD Liberty Pipeline to transport crude oil from the Rockies and Bakken production areas to Cushing, Okla. With Plains All American Pipeline, Phillips 66 formed Red Oak Pipeline LLC to build the Red Oak Pipeline system to transport crude oil from Cushing and the Permian basin to Corpus Christi, Ingleside, Houston, and Beaumont, Tex. Initial service from Cushing to the Gulf Coast had been targeted for as early as first-quarter 2021 (OGJ Online, June 10, 2019).
Phillips 66, Harvest Midstream Co., and PBF Logistics LP announced plans in early 2019 to jointly develop the ACE Pipeline system to transport crude from the market hub in St. James, La., to downstream refining destinations in Belle Chasse, Meraux, and Chalmette, La. (OGJ Online, Jan. 14, 2019).
Sweeny Frac 4 is a planned 150,000-b/d fractionator at Phillips 66’s Sweeny refinery complex in Old Ocean, Tex. The company does not expect DCP Midstream to exercise its option to participate in Sweeny Fracs 2 and 3 in 2020 and is also deferring or cancelling certain discretionary projects in its refining segment. Sweeny Fracs 2 and 3 are planned 150,000-b/d expansions. Sweeny Frac 1 (100,000 b/d) entered service in 2015.
The company’s reduction in adjusted capital spending from its announced $3.3-billion budget was partially offset by an anticipated $400-million reduction in cash capital contributions from DCP Midstream.
