Refining

Our Refining segment transforms crude oil into petroleum products such as gasoline, diesel and aviation fuel. Phillips 66 is one of the largest refiners in the United States and worldwide, with 14 refineries and a net crude oil processing capacity of 2.2 million barrels per day.

2013 Accomplishments

  • Ongoing focus on safety, with multiple facilities earning external recognition for superior safety performance during the year.
  • Increased domestic advantaged crude processing to 74 percent of total crude runs in 2013, compared to 62 percent in 2012.
  • Captured strong refining margins in the Central Corridor Region.
  • Continuing improvements in optimization and increasing clean product yield.
  • Achieved industry-leading distillate yield of approximately 40 percent.
  • Global refinery utilization rate of 93 percent in 2013, well above industry average.
  • Expanded U.S. refined product export capability to 410,000 BPD by the end of 2013.

Key Strategies

In 2013, Phillips 66 continued its strategy of aggressively pursuing increased access to advantaged crude oil to run in its refineries by expanding its own system capabilities and partnering with third-party transportation providers. Our 2013 U.S. refinery crude slate was 74 percent advantaged, compared with 62 percent in 2012. This increase was primarily due to processing 239,000 BPD of shale and similar tight oils, 118,000 BPD more than in 2012, as well as to additional domestic crudes consistently trading at a discount to Brent crude. Our Refining, Commercial and Transportation businesses work in collaboration to develop strategies for accessing advantaged crude with the goal of having our U.S. refineries capable of processing 100 percent advantaged crudes by the end of 2016.

By the end of 2013, we had 2,000 new railcars in service delivering primarily Bakken shale crude oil from North Dakota to our Bayway Refinery in New Jersey and our Ferndale Refinery in Washington. We are building new rail-unloading facilities at these refineries that are expected to be operational in the second half of 2014. In early 2014, we ordered another 1,200 crude oil railcars that are expected to be delivered by the end of the year. We continue to use third-party logistics companies to deliver advantaged crude oil to our refineries and signed several new crude logistics agreements in 2013.

Phillips 66 is also making modest investments in its refineries to increase export capabilities and liquids yields. In 2013, we removed constraints at our coastal refineries to increase our total U.S. export capacity from 285,000 BPD in 2012 to 410,000 BPD. Over the next few years, we expect to achieve a clean product yield improvement of 1 percent with minimal capital investment. We are specifically focused on increasing yields of diesel because we expect global diesel demand to grow faster than gasoline demand. We already have an industry-leading distillate yield of about 40 percent and expect to achieve another 1 percent increase over the next few years.