U.S. oil and refining giant Phillips 66 is planning a shift in focus, moving away from production of refined products and concentrating on energy transportation and processing infrastructure, according to energy industry blog FuelFix.
Two major projects to be completed in Brazoria County, Texas, estimated to be worth a total of $3 billion, have been approved by the company's board of directors and are expected to form the backbone of Phillips 66's operations. Both facilities will create about 50 permanent jobs, the company said.
RELATED: Shell looking to sell $1 billion stake in Gulf Coast pipeline
The first project — a liquefied petroleum gas export terminal — is planned to ship about 4.4 million barrels of products per month by 2016. There is a significant demand for refined production from the United States overseas, due to the country's lower costs, so Phillips 66 should not be worried about distribution. The second project is a new fractionation facility that would process 100,000 barrels of natural gas liquids per day in 2015 and would produce chemicals used in plastics and other industries.
Phillips 66 spokesman Dean Acosta told FuelFix that close to 70 percent of the company's capital budget in 2014 will be allocated to midstream operations. With the natural gas revolution in recent years, the U.S. midstream industry has been gaining speed and Phillips 66 is not the only major energy company to seek more shareholder value in the domestic market for pipelines, storage and other facilities, the blog pointed out.
