US Phillips 66 moving forward with $3bn NGL projects in Texas

07 February 2014 18:16 Source:ICIS News

HOUSTON (ICIS)--Phillips 66’s board of directors has decided to move forward with two major natural gas liquids (NGLs) projects in Texas representing more than $3bn in investment, the company announced on Friday.

The board approved building a 100,000 bbl/day NGL fractionator in Old Ocean, located southwest of Houston near the US producer’s Sweeny Refinery. The new facility will use Y-grade mixed NGLs from nearby pipelines to produce purity NGLs for the petrochemical and heating industries.

The fractionator is expected to start up in Q3 2015, the company said.

Phillips 66 initially announced its interest in the fractionator in April 2013.

Also, the board gave the go-ahead to build a liquid petroleum gas (LPG) export terminal at the site of the company’s existing marine terminal in Freeport.

Initial export capacity of the terminal will be 4.4m bbl/month, with a ship loading rate of 36,000 bbl/hour.

Operations at the LPG terminal, interest in which was announced in October 2013, should begin in mid 2016, the company said.

Both projects will include NGL storage and additional pipelines with connectivity to the benchmark Mont Belvieu, Texas, hub.

Also, a 100,000 bbl/day de-ethaniser unit will be built near the Sweeny Refinery to upgrade domestic propane for export, Phillips 66 said.

Site preparation has begun for the Sweeny fractionator, as well as order placement for equipment and expansion of supporting infrastructure, Phillips 66 said.

The US producer is working on securing the necessary permits for the Freeport LPG terminal, after which construction will commence, the company said.

“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 of Phillips 66 Commercial, Marketing, Transportation and Business Development.

Added Taylor: “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 maximise our existing infrastructure and will position us for further growth.”

By Jeremy Pafford