U.S. oil refiner, Phillips 66, has announced its 2021 capital program, which accounts $1,7 billion of capital budget, along with its biofuels and renewable diesel transition.
The announcement underlines that $0,3 of the $1,7 billion is accountable for Phillips partners, as their 2021 capital budget is supported by its diversified portfolio. Combined with the company’s contributions from affiliates, the adjusted 2021 capital program is at $2,38 million, slightly down from its prior $2,9 billion forecast.
“We continue to focus on reducing capital expenditures as market conditions remain challenged. We are prioritizing completion of in-progress projects, as well as advancing our investments in renewable fuels,” said Greg Garland, chairman and CEO of Phillips 66.
And added: “Phillips 66 is committed to financial flexibility, enabled by our balance sheet and strong investment grade credit ratings. We continue to execute our strategy with a focus on disciplined capital allocation and long-term value creation for our shareholders, including a secure, competitive, growing dividend.”
Recommended for you: Despite renewables, global CO2 emissions to grow 4% in 2021: S&P
Phillips 66 turns to biofuels and renewable diesel
The company will focus $610 million of the total capital budget to its midstream business, with $300 million for Phillips partners. The budget will be directed to completing ongoing projects, and the optimization of producing ones.
“Refining capital budget includes $521 million of sustaining capital for reliability, safety and environmental projects. The Refining budget will also include $255 million to fund high-return, quick-payout projects to enhance margins by improving clean product yields and reducing feedstock costs,” the report highlights.
This budget already includes pre-construction and engineering costs, related to the San Francisco Refinery reconstruction; it will be converted into a biofuels plant, according to the company.
As we’ve reported previously, a number of U.S refiners have been transforming their assets for biofuels and renewable diesel production. As for the San Francisco Refinery, located in Rodeo, California, when it’s completed in 2024 it will produce 800 million gallons a year of renewable fuels.