Phillips 66 converting Alliance refinery into terminal

Phillips 66 has decided to move forward with a plan to transform its 255,000-b/d Alliance refinery on the Mississippi River in Belle Chasse, Plaquemines Parish, La., about 25 miles southeast of New Orleans, into a terminal that the company will continue to operate as part of its midstream portfolio.

Phillips 66 said in a release Nov. 8 its decision to advance the proposed refinery-to-terminal conversion project follows the company’s evaluation of several options to save the site in consideration of the investment that otherwise would be required to repair refinery infrastructure in the wake of damages caused by Hurricane Ida, the eye of which made landfall as a Category 4 storm along the southeastern coast of Louisiana in late-August 2021 (OGJ Online, Sept. 1, 2021; Aug. 30, 2021).

“Alliance’s existing infrastructure and [US] Gulf Coast location make it an attractive midstream asset, [and] Phillips 66 will continue to be a major refiner with [its remaining] 12 [refineries] in the US and Europe,” said Greg Garland, Phillips 66’s chairman and chief executive officer.

Acknowledging potential impacts of the decision ultimately cease refining operations at Belle Chasse, Garland reiterated the company’s ongoing commitment to maintain ongoing activities at the site and offer support to Alliance’s 500 employees and 400 contractors during the transitional period.

“Our decision was a difficult one, and we understand it has a profound impact on our employees, contractors, and the broader Belle Chasse community,” Garland said. “We will work to help them through this transition and support them as Alliance takes on a new role in our portfolio.”

In a separate filing to the US Securities and Exchange Commission on Nov. 8, Phillips 66 said that while it is currently in the process of determining costs that will be associated with Alliance’s permanent shutdown of refining operations and conversion to terminaling operations, the company does not expect those costs to likely be material to its consolidated financial position, operational results, or cash flows.

Phillips 66—which warned on Oct. 29 the Alliance refinery was to remain offline through fourth-quarter 2021 because of impacts sustained following Hurricane Ida—said it expects to begin the conversion project sometime in 2022.

Further details regarding the proposed timeline for the project have yet to be revealed.