Phillips 66 to add Permian gas processing, USGC fractionation capacities

Phillips 66 Co. has taken final investment decision to move forward with two projects designed to expand its Permian basin and US Gulf Coast (USGC) midstream capabilities as part of the operator’s broader integrated NGL wellhead-to-market strategy.

The newly approved projects—one of which will add fresh pipeline capacity—specifically aim to enhance the company’s existing Permian natural gas processing and USGC fractionation operations to support growing Permian production from customers’ dedicated acreage, Phillips 66 said on May 18.

In the Permian, Phillips 66 will build the 300-MMcfd Zeus gas processing plant and new 45-mile, 20-in. Midland Express (MEX) pipeline, the latter of which is designed to integrate the company’s Permian-wide gathering systems.

Scheduled to enter service alongside the Zeus gas plant in 2028, MEX pipeline will be equipped to transport up to 230 MMcfd of Permian-sourced wellhead gas, as well as provide future bidirectional flexibility between multiple processing sites, according to the operator.

Phillips 66 confirmed it will also add a third fractionator at USGC Coastal Bend operations in Robstown, Tex.

Previously referenced as the Corpus Christi fractionator—or BTT2—project, the newly named Coast Bend Fractionator 3 (CBF3) will have 100,000 b/d of NGL fractionation capacity to increase bidirectional access for Y-grade and purities between Texas operations in Corpus Christi, Sweeny, and Mont Belvieu.

Also slated for startup in 2028, the CBF3 project will involve an NGL purity pipe expansion and the addition of new infrastructure for water treatment.

"Zeus [g]as [p]lant and a third Coastal Bend [f]ractionator will strengthen our ability to move growing Permian volumes across an integrated value chain, from the wellhead to key market centers," said Don Baldridge, Phillips 66’s executive vice-president, Midstream.

The two projects aim to position the company to better serve its customers while capturing additional value across its midstream network, Baldridge said.

Both projects are included in Phillips 66’s capital spending program and fall within its $2-2.5 billion capital spending range, in line with the operator’s commitment to reduce debt to $17 billion by yearend 2027 to meet its objective of returning more than 50% of net operating cash flow—excluding working capital—to shareholders, the operator said.

Intended to help connect advantaged supply to downstream assets and premium markets, Phillips 66’s Zeus gas plant and CBF3 projects come amid expectations of continued growth in Permian production during the next 5 years, according to the company.

The new projects build on the operator’s recent expansion plans in the region, which also includes the previously announced 300-MMcfd Iron Mesa gas processing plant now under construction in Goldsmith, Ector County, Tex., at Phillip 66’s existing complex in West Texas’ Midland basin.