February 1st, 2021 [Street Insider] – Phillips 66 (NYSE: PSX), a diversified energy manufacturing and logistics company, announces a fourth-quarter 2020 loss of $539 million, compared with a loss of $799 million in the third quarter of 2020.
Excluding special items of $32 million, the company had an adjusted loss of $507 million in the fourth quarter, compared with a third-quarter adjusted loss of $1 million.
“2020 was a year of unprecedented challenges,” said Greg Garland, chairman and CEO of Phillips 66. “We took early, decisive steps to reduce costs and capital spending, secure additional liquidity and suspend share repurchases. These actions, combined with cash flow generation from our diversified portfolio, provided us with financial flexibility to maintain our strong investment grade credit ratings and sustain the dividend. We are focused on the health and safety of our employees, their families and our communities as we deliver products that are essential to the global economy.
“During the year, we reached major Midstream growth project milestones. We completed the Gray Oak Pipeline, our largest pipeline project to date. Gray Oak connects to the South Texas Gateway Terminal, which began crude oil export operations across two new docks. At the Sweeny Hub, we finished the Phase 2 expansion, adding two fractionators and storage capacity at Clemens Caverns. At Beaumont, the fourth dock began operations, and 2.2 million barrels of crude oil storage were placed into service.
“CPChem polyethylene sales volumes set a new record in 2020, meeting global consumer demand, including for food packaging and medical supplies. In Refining, we announced the Rodeo Renewed project to meet the growing demand for renewable energy. Marketing and Specialties reported one of its strongest financial performances.
“In 2020, our employees delivered exceptional operating performance, achieving record results in personal safety, process safety and environmental performance. We also advanced our digital transformation efforts, fostered innovation across our company and implemented new technologies, including digital systems for work processes and artificial intelligence to predict maintenance requirements and optimize processing unit performance.
“Looking ahead, we are optimistic about the impact of the COVID-19 vaccines on the economic recovery, as well as opportunities for value creation across our portfolio, including investments in a lower-carbon future. We remain committed to disciplined capital allocation and a strong balance sheet.”
Strategic Update
Phillips 66 completed two new 150,000 BPD fractionators at its Sweeny Hub, bringing the site’s total fractionation capacity to 400,000 BPD. Frac 2 commenced commercial operations in September, and Frac 3 started operations in October. Phillips 66 plans to resume construction of the fourth fractionator in the second half of 2021. Upon completion of Frac 4, the Sweeny Hub will have 550,000 BPD of fractionation capacity. The fractionators are supported by long-term customer commitments.
At the South Texas Gateway Terminal, which is being constructed by Buckeye Partners, L.P., the second dock commenced crude oil export operations in the fourth quarter. Upon completion in the first quarter of 2021, the marine export terminal will have storage capacity of 8.6 million barrels and up to 800,000 BPD of dock throughput capacity. Phillips 66 Partners owns a 25% interest in the terminal.
Phillips 66 Partners continued construction of the C2G Pipeline, a 16 inch ethane pipeline that will connect its Clemens Caverns storage facility to petrochemical facilities in Gregory, Texas, near Corpus Christi, Texas. The project is backed by long-term commitments and is expected to be completed in mid-2021.
At Beaumont Terminal, the company completed the addition of a new 200,000 BPD dock in the fourth quarter, bringing the terminal’s total dock capacity to 800,000 BPD. The terminal has total crude and product storage capacity of 16.8 million barrels.
In Chemicals, CPChem and Qatar Petroleum are jointly pursuing development of petrochemical facilities on the U.S. Gulf Coast and in Ras Laffan, Qatar. CPChem is closely monitoring economic developments and has deferred final investment decision for its U.S. Gulf Coast project until 2022.
CPChem is advancing optimization and debottleneck opportunities. This includes recently approved projects at its Cedar Bayou facility in Baytown, Texas, that will increase capacity of ethylene and polyethylene. In addition, CPChem is pursuing expansion of its normal alpha olefins production.
In October, CPChem announced its first U.S. commercial-scale production of circular polyethylene from recycled mixed-waste plastics at its Cedar Bayou facility and received International Sustainability and Carbon Certification PLUS (ISCC PLUS) certification for this location in November. CPChem is using advanced recycling technology to convert plastic waste to valuable liquids that can become new petrochemicals. CPChem’s circular polyethylene matches the performance and safety specifications of traditional polymers.
In Refining, Phillips 66 is advancing its plans at the San Francisco Refinery in Rodeo, California, to meet the growing demand for renewable fuels. The company will complete its diesel hydrotreater conversion in mid-2021, which will produce 8,000 BPD (120 million gallons per year) of renewable diesel. Upon expected completion of the full conversion in early 2024, the facility will have over 50,000 BPD (800 million gallons per year) of renewable fuel production capacity. The conversion is expected to reduce the plant’s greenhouse gas emissions by 50% and help California meet its low-carbon objectives.
In Marketing, 106 retail sites in the Central region were acquired in January through a joint venture. This will enable long-term placement of Phillips 66 refinery production and extend participation in the retail value chain.
Recently, Phillips 66 announced the formation of an Emerging Energy organization. This group is charged with establishing a lower-carbon business platform that delivers attractive returns. It will focus on opportunities within our portfolio, such as Rodeo Renewed, as well as commercializing emerging energy technologies for a sustainable future. Combined with the company’s research and innovation efforts, the Emerging Energy organization uniquely positions Phillips 66 to develop and deploy technologies and products to support a lower-carbon future.
In collaboration with Georgia Institute of Technology, Phillips 66 received a U.S. Department of Energy grant for improving the costs, performance and reliability of an electrolysis technology that has the potential to convert carbon dioxide to clean fuels.
A field demonstration of a proprietary Phillips 66 solid oxide fuel technology was installed at a Phillips 66 facility to provide power generation for pipeline integrity.
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