Phillips 66 Announces 2017 Capital Program

Phillips 66 (NYSE: PSX), an energy manufacturing and logistics company,
announces its 2017 capital budget of $2.7 billion. The plan includes
$1.3 billion for midstream growth and $0.9 billion directed toward
enhancing refining returns and supporting operating excellence.

“The 2017 capital program is consistent with our disciplined approach to
capital allocation,” said chairman and CEO Greg Garland. “Returns on our
investments are important, and the reduction in capital spending from
prior years reflects that fewer projects meet our return thresholds in
the current business environment. We continue to invest sustaining
capital to ensure our assets run safely and reliably. We are committed
to maintaining a strong balance sheet and financial flexibility, which
allows us to return significant capital to shareholders through the
business cycle, in the form of share repurchases and a growing, secure
dividend.”

In Midstream, Phillips 66 plans to invest $1.5 billion in its Natural
Gas Liquids (NGL) and Transportation businesses, with 85 percent of that
targeting growth projects. The company is focused on development around
its existing infrastructure’s footprint, including continued expansion
of the Beaumont Terminal and investment in pipelines and other terminals.

Midstream capital encompasses spending expected by Phillips 66 Partners
of $437 million, including $56 million of maintenance capital. Expansion
capital at the partnership will be in support of organic projects, such
as the Bayou Bridge Pipeline, which will connect the Beaumont Terminal
with St. James, Louisiana. The western leg of the pipeline began
operation in April 2016, while the eastern leg, with service from Lake
Charles, Louisiana, to St. James, is expected to be completed in the
second half of 2017.

Phillips 66 plans $905 million of capital expenditures and investments
in Refining, with 65 percent of that for reliability, safety and
environmental projects. Growth capital in Refining will be directed
toward small, high-return, quick pay-out projects, primarily to reduce
feedstock costs and improve clean product yields. These include a
project at the Billings Refinery to increase heavy crude processing
capabilities and yield improvement projects at the Bayway and Ponca City
refineries.

In Marketing and Specialties, the company plans to invest $132 million
of growth and sustaining capital. The growth investment reflects
Phillips 66’s continued plans to expand and enhance its fuels marketing
business.

In Corporate and Other, the company plans to fund $112 million in
projects, primarily related to information technology and facilities.

Phillips 66’s proportionate share of capital spending by joint ventures
Chevron Phillips Chemical Company LLC (CPChem), DCP Midstream, LLC (DCP
Midstream) and WRB Refining LP (WRB) is expected to be $1.1 billion.
Including these equity affiliates, the company’s total 2017 capital
program is projected to be $3.8 billion.

In Chemicals, CPChem is investing in projects aimed at capturing
cost-advantaged petrochemical feedstocks on the U.S. Gulf Coast.
Phillips 66’s share of CPChem’s 2017 capital expenditures is expected to
be $675 million. Funding will support completion of CPChem’s 3.3
billion-pound-per-year ethane cracker and two 1.1 billion-pound-per-year
polyethylene facilities being constructed in the Gulf Coast region. The
expected startup for the polyethylene facilities is mid-2017, with the
ethane cracker expected to be in operation in the second half of next
year. Once completed, these facilities will increase CPChem’s global
ethylene and polyethylene capacity by approximately one-third. Phillips
66’s expected share of DCP Midstream’s 2017 capital spending is $243
million, while its anticipated share of WRB’s capital expenditures is
$135 million. Capital spending by these three joint ventures is expected
to be self-funded.

				Millions of Dollars
				Sustaining Capital					Growth Capital				Capital Program
Midstream
Phillips 66				$	170				942				1,112
Phillips 66 Partners					56				381				437
					226				1,323				1,549
Chemicals					-				-				-
Refining (1)					588				317				905
Marketing and Specialties					57				75				132
Corporate and Other					110				2				112
Phillips 66 Consolidated					981				1,717				2,698
DCP					68				175				243
CPChem					225				450				675
WRB					107				28				135
Selected Equity Affiliates					400				653				1,053
Total Capital Program				$	1,381				2,370				3,751
(1) Includes non-cash capitalized leases of $14 million in Refining.

About Phillips 66

Phillips 66 is a diversified energy manufacturing and logistics company.
With a portfolio of Midstream, Chemicals, Refining, and Marketing and
Specialties businesses, the company processes, transports, stores and
markets fuels and products globally. Phillips 66 Partners, the company's
master limited partnership, is an integral asset in the portfolio.
Headquartered in Houston, the company has 14,000 employees committed to
safety and operating excellence. Phillips 66 had $50 billion of assets
as of Sept. 30, 2016. For more information, visit www.phillips66.com
or follow us on Twitter @Phillips66Co.

CAUTIONARY STATEMENT FOR THE PURPOSES OF THE "SAFE HARBOR" PROVISIONS
OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This news release contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, which
are intended to be covered by the safe harbors created thereby. Words
and phrases such as “is anticipated,” “is estimated,” “is expected,” “is
planned,” “is scheduled,” “is targeted,” “believes,” “intends,”
“objectives,” “projects,” “strategies” and similar expressions are used
to identify such forward-looking statements. However, the absence of
these words does not mean that a statement is not forward-looking.
Forward-looking statements relating to Phillips 66’s operations
(including joint venture operations) are based on management’s
expectations, estimates and projections about the company, its interests
and the energy industry in general on the date this news release was
prepared. These statements are not guarantees of future performance and
involve certain risks, uncertainties and assumptions that are difficult
to predict. Therefore, actual outcomes and results may differ materially
from what is expressed or forecast in such forward-looking statements.
Factors that could cause actual results or events to differ materially
from those described in the forward-looking statements include
fluctuations in NGL, crude oil, and natural gas prices, and
petrochemical and refining margins; unexpected changes in costs for
constructing, modifying or operating our facilities; unexpected
difficulties in manufacturing, refining or transporting our products;
lack of, or disruptions in, adequate and reliable transportation for our
NGL, crude oil, natural gas, and refined products; potential liability
from litigation or for remedial actions, including removal and
reclamation obligations under environmental regulations; limited access
to capital or significantly higher cost of capital related to
illiquidity or uncertainty in the domestic or international financial
markets; and other economic, business, competitive and/or regulatory
factors affecting Phillips 66’s businesses generally as set forth in our
filings with the Securities and Exchange Commission. Phillips 66 is
under no obligation (and expressly disclaims any such obligation) to
update or alter its forward-looking statements, whether as a result of
new information, future events or otherwise.

The disaggregation of capital spending between sustaining and growth is
not a distinction recognized under generally accepted accounting
principles in the United States. The company provides such disaggregated
information to demonstrate management’s return expectations with respect
to capital spending.

View source version on businesswire.com: http://www.businesswire.com/news/home/20161209005525/en/

Source: Business Wire
(December 9, 2016 - 11:59 AM EST)

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