Phillips 66 elevates NGL business to new heights

Bernardo Fallas
Phillips 66 Corporate Communications

There are big projects, and then there are projects that raise the bar.

The latter is exactly what Major Projects, Refining and Midstream teams at Phillips 66 have delivered with the recent startup of two natural gas liquids fractionators at the Sweeny Hub in Texas. They quadruple processing capacity to 400,000 barrels per day and elevate the company’s NGL business to new heights.

“The successful startup of these two world-scale units represents a milestone for Phillips 66,” said Michael Wirkowski, Vice President of Major Projects at Phillips 66. “It positions the company as a major player in the NGL space and the Sweeny Hub as a world-class and strategically located market alternative.”

 

The fractionators — two of the largest in the world at 150,000 BPD each — cap a $1.4 billion investment by Phillips 66 known as the Sweeny Hub Phase 2 expansion. The project finished some $100 million under budget and two months ahead of schedule despite challenges posed by weather events and the COVID-19 pandemic. Best of all, Wirkowski said, it ranks as the safest megaproject ever built by Phillips 66.

“From concept to completion, the project sets a new standard for the industry,” Wirkowski said.

World-class NGL hub

Fractionators use distillation to separate raw NGLs into ethane, propane, butanes and pentanes, which are in-demand hydrocarbons.

The new fractionation complex at the Sweeny Refinery is the heart of the Sweeny Hub, a collection of NGL-gathering, processing and logistics assets in Texas’ Brazoria County that also includes the Phillips 66 Freeport LPG Export Terminal and the nearby Phillips 66 Partners Clemens Caverns Storage Facility. The latter recently increased capacity to 16.5 million barrels in support of the fractionators.

“Clemens is no longer a lateral asset and plays a more vital role in the company,” said Jamey Davis, Phillips 66 Clemens Operations Supervisor. “We now have the storage capacity and the flexibility to manage product swings for our customers and our units, so the fractionators can operate at 100% 24/7.”

Phillips 66 also added over 25 miles of pipelines and connections to the Sweeny Hub to move products among the new fractionators and existing assets.

Together, the Sweeny Hub Phase 2 expansion and other related projects total nearly $2 billion in investments aimed at boosting optimization and integration across the Phillips 66 NGL value chain. Furthermore, they position the company to capitalize on rising domestic and global demand from the petrochemical and fuel sectors.

“Customers trust Phillips 66; they want to do business with us,” said Alex Sideris, Manager of Phillips 66 NGL Strategy Execution. “We are fractionating barrels for third-party customers and delivering products into international markets.”

Sweeny now ranks as the third-largest NGL-fractionation hub in the U.S., behind only Mont Belvieu, Texas, and Conway, Kansas. Phillips 66 also has interests in fractionators in those locations.

“With these expansions, Phillips 66 has positioned itself as the premier Mont Belvieu alternative, and our strategy is to continue to grow and optimize the Sweeny Hub,” Sideris said.

NGLs fuel daily life

NGLs have a wide range of industrial, residential and agricultural applications. In the U.S., their plentiful availability resulting from the shale boom has fueled a petrochemical renaissance worth an estimated $200 billion in announced capital investment since 2010, much of it in the Gulf Coast region.

Ethane is the feedstock of choice for U.S. petrochemical producers. Propane and butanes, often referred to as LPG, are used for heating, cooking, crop-drying and as feedstock for petrochemical production. Pentanes-plus, including natural gasoline, are used as blendstock for gasoline, as diluent for heavy crude oil production and feedstocks for petrochemical facilities.

The fractionators, which are underpinned by long-term customer commitments, are starting up five years after the first fractionator at the Sweeny Refinery. Fractionator 1, a 100,000-BPD unit owned by Phillips 66 Partners and operated by the refinery, came online in late 2015.

Engaged in safety

Dubbed Fracs 2 and 3, the new units were mechanically completed this summer and came online in September and October. They mark the end of a two-year endeavor that employed 4,000 contractors, including more than 2,500 at peak in 2020 in the middle of the COVID-19 pandemic.

The project finished with a total recordable injury/illness rate of 0.09 — 33 times better than the industry average, per the latest data by the U.S. Bureau of Labor Statistics — and with 4 million consecutive work hours without a recordable incident.

“Great leadership and an engaged workforce really got us though this COVID timeframe and saw fantastic success,” said Sam Windom, Health, Safety and Environment Manager for Major Projects at Phillips 66. “Four million hours without a recordable (injury to finish the project) in the midst of everything is unprecedented.”

Set up for success

Phillips 66 worked closely with project contractor S&B Engineers and Constructors to achieve nearly $300 million in capital investment avoidance while delivering two of the largest fractionators by capacity in the industry. They achieved these efficiencies by applying lessons learned from Frac 1 and by adopting standard-design principles and best practices, which will be used for projects going forward.

“From the engineering and contract strategy, we had an experienced team that knew Phillips 66 and our expectations, and they rose to meet them,” Phillips 66 Project Manager John Pickering said. “Together, we set up a foundation for success and the safe execution of the project before we ever started.”

We went world class — starting up 300,000 barrels per day of capacity on the same site at one time — and made a statement to the markets.

John Pickering Phillips 66 Project Manager

The new fractionators boost integration between Phillips 66 and joint ventures DCP Midstream and Chevron Phillips Chemical. DCP and Phillips 66 Partners’ Sand Hills Pipeline will be among the pipelines delivering raw-NGL feed, also known as Y-grade, for processing, while CPChem, which operates steam crackers at Sweeny and Baytown, Texas, will be among the customers taking ethane for conversion into chemicals and plastics.

Phillips 66 will market the propane, butanes and pentanes-plus domestically and abroad, the latter through the Freeport terminal. Phillips 66 Partners also built a pipeline to transport pentanes-plus to the Pasadena Terminal near Houston and is constructing another to transport ethane from Clemens Caverns to petrochemical facilities in South Texas.

“This project shows Phillips 66 is serious about being in the fractionation business,” Pickering said. “We went world class — starting up 300,000 barrels per day of capacity on the same site at one time — and made a statement to the markets.”

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