December 16, 2025 [Reuters]- Phillips 66 has approved a $2.4 billion capital budget for 2026, slightly above its forecast for this year, as it shifts growth spending toward expanding its midstream natural gas liquids (NGL) network and higher-return refining projects.

The spending plan, announced on Monday, underscores the U.S. refiner’s focus on shareholder returns as it invests in assets aimed at improving margins and cash flow across its integrated business, CEO Mark Lashier said.

The company’s acquisition of full ownership of WRB Refining, which operates major refineries in Illinois and Texas, from Cenovus Energy in September, is expected to increase its crude processing options.

Its capital budget for the midstream and refining units of $1.1 billion each compares with the estimated expenditure of $975 million and $822 million, respectively, in 2025.

Key investments in its midstream segment include the Iron Mesa gas processing plant, a 300-million-cubic-feet-per-day facility in the Permian Basin that is expected to start up in the first quarter of 2027.

It also includes the expansion of the Coastal Bend NGL pipeline, which will raise capacity to 350,000 barrels per day by the fourth quarter of 2026.

Besides, Phillips 66 is planning a new fractionator in Corpus Christi that would add 100,000 barrels per day of NGL fractionation capacity. A final investment decision is expected in early 2026, with completion targeted for 2028.

A fractionator separates mixed NGL into individual products such as ethane, propane and butane, allowing them to be marketed, transported or exported separately.

The growth capital plan for the refining segment includes Humber gasoline quality improvement project, expected to start up in the second quarter of 2027, and more than 100 smaller projects aimed at improving crude flexibility, feedstock optimization and clean product yields.