U.S. oil refiner Phillips 66 (NYSE: PSX) said June 13 it plans to expand its NGL project in Sweeny, Texas.
The expansion includes the construction of two natural gas fractionators, with a capacity of 150,000 barrel per day (bbl/d) each, the Houston-based company said.
Supply agreements have been secured for Y-grade NGL feedstock, including an agreement with DCP Midstream LP (NYSE: DCP) which has an option to acquire up to a 30% ownership interest in the new fractionators. The option would be exercisable once the project is completed and has a capital investment of about $400 million.
The project expansion, expected to cost up to $1.5 billion and begin commercial operations in late 2020, will increase Sweeny's natural gas refining capacity to 400,000 bbl/d.
“We are pleased to move forward with the Sweeny Hub expansion, a key part of our Midstream growth strategy that further optimizes our integrated NGL value chain,” Greg Garland, chairman and CEO of Phillips 66, said in a statement. “The Sweeny Hub is strategically positioned to provide fractionation capacity for rapidly growing Permian Basin NGL production and access to U.S. Gulf Coast petrochemical, fuels and LPG export markets.”