US ConocoPhillips to include CP Chem stake in refinery spinoff

08 September 2011 20:48  [Source: ICIS news]

A ConocoPhillips refineryHOUSTON (ICIS)--US-based ConocoPhillips confirmed on Thursday its plan to include its Chevron Phillips Chemical (CP Chem) stake in the spinoff of its refinery business.

That spinoff will become a new downstream company that will combine three of ConocoPhillips's core businesses: refining, marketing and transportation (RM&T); chemicals; and midstream.

ConocoPhillips laid out its plans for the downstream spinoff, which it plans to complete by the second quarter of 2012, during the Barclay’s Energy Conference in New York City.

“We think it's a very unique downstream company [in] scope and size,” chief executive Jim Mulva said. “It's unique from a downstream perspective… it's integrated because of refining, midstream and chemicals.”

The new downstream company's portfolio will include about $50bn (€36bn) in assets.

The RM&T segment has 16 refineries, 12 of which are in the US, with a Nelson complexity average of 12. They have a capacity of 2.4m bbl/day, and about 10,000 branded marketing outlets.

The chemicals segment, which includes the CP Chem stake, is North America’s largest producer of high density polyethylene (HDPE), the company said. It is also North America’s fourth largest ethylene producer. CP Chem is a 50:50 joint venture made up of ConocoPhillips and Chevron.

The midstream component is the largest gas gatherer and processor and natural gas liquids (NGL) producer in the US, the company said. It includes 60 plants, 11 fractionators and 61,000 miles (98,000km) of pipeline.

After spinning off its downstream business, the new ConocoPhillips would be the largest pure-play exploration and production (E&P) company in the US, the company added, with 1.7m barrels of oil equivalent (boe) production a day in 2011 and 8.5bn boe in reserves.

($1 = €0.71)

For more on CP Chem visit ICIS company intelligence

By: Bobbie Clark
+1 713 525 2653

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