Phillips 66: Billings Refinery

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Conoco and Phillips 66 announced on November 18, 2001 that their boards of directors had unanimously approved a definitive agreement for a "merger of equals". The merged company, ConocoPhillips, became the third-largest integrated U.S. energy company based on market capitalization and oil and gas reserves and production. On November 11, 2011 ConocoPhillips announced that Phillips 66 would be the name of a new independent oil and gasoline refining and marketing firm, created as ConocoPhillips split into two companies. ConocoPhillips kept the current name of the company and concentrated on oil exploration and production side while Phillips 66 included refining, marketing, midstream, and chemical portions of the company. Photo: Hugh Pickens all rights reserved.

by Hugh Pickens, Ponca City Oklahoma


The purpose of this report is to provide a comprehensive overview of Phillips 66 that documents and explains the company's business strategy and execution of that strategy.

Major Sections of this report on Phillips 66 include:

Safety, Environment, Legal


Corporate


Strategic and Financial


Business Segments


Stock Market


Reference

Refining Business Segment


Increasing Profitability in Refining Business Segment


Detailed Look at Ponca City Refinery


Other Phillips Refineries


Other Locations


Contents

Master Index of Articles about Phillips 66

The 587 foot tall Mammoet PTC 140 crane, seen here from North First Street, towers over the Refinery Complex in Ponca City. The supercrane was used to move two new 232 ton coker reactor units within the refinery on September 29, 2013. Phillips was willing to invest $70 million in the two new coker reactor units because the Ponca City Refinery is one of the best run, safest, and most profitable of Phillips' fifteen worldwide refineries and Garland wants the refinery in Ponca City to continue to run smoothly and profitably. This photograph of the supercrane in Ponca City was taken from almost two miles away from the crane. Photo: Hugh Pickens All Rights Reserved.
Hugh Pickens, an analyst who closely follows Phillips 66, speaks with Phillips CEO Greg Garland (right) about the disposition of the North Tower, South Tower, and Research West at Phillips' Ponca City Refinery after Garland's speech to the Bartlesville Chamber of Commerce on August 13, 2014.

by Hugh Pickens, Ponca City Oklahoma


The purpose of this report is to provide a comprehensive overview of Phillips 66 that documents and explains the company's business strategy and execution of that strategy.

Major Sections of this report on Phillips 66 include:

Safety, Environment, Legal


Corporate


Strategic and Financial


Business Segments


Stock Market


Reference

Refining Business Segment


Increasing Profitability in Refining Business Segment


Detailed Look at Ponca City Refinery


Other Phillips Refineries


Other Locations


Billings Refinery

The Billings Refinery is located in Billings, Mont. It has a crude oil processing capacity of 58 MBD and processes a mixture of Canadian heavy, high-sulfur crude oil plus domestic high-sulfur and low-sulfur crude oil, all delivered by pipeline. Its facilities include fluid catalytic cracking and hydrodesulfurization units. A delayed coker converts heavy, high-sulfur residue into higher-value light oils. The refinery produces a high percentage of transportation fuels, such as gasoline, aviation and diesel fuels, as well as fuel-grade petroleum coke. Finished petroleum products from the refinery are delivered via pipeline, railcar and truck. Pipelines transport most of the refined products to markets in Montana, Wyoming, Idaho, Utah and Washington.[1] Photo by jonmartin Flicker Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic (CC BY-NC-SA 2.0)

Description of Billing Refinery

The Billings Refinery is located in Billings, Mont. It has a crude oil processing capacity of 58 MBD and processes a mixture of Canadian heavy, high-sulfur crude oil plus domestic high-sulfur and low-sulfur crude oil, all delivered by pipeline. Its facilities include fluid catalytic cracking and hydrodesulfurization units. A delayed coker converts heavy, high-sulfur residue into higher-value light oils. The refinery produces a high percentage of transportation fuels, such as gasoline, aviation and diesel fuels, as well as fuel-grade petroleum coke. Finished petroleum products from the refinery are delivered via pipeline, railcar and truck. Pipelines transport most of the refined products to markets in Montana, Wyoming, Idaho, Utah and Washington.[2]

The Billings Refinery's market value in 2010 according to Montana property records is $508,333,155.[3]

News and Views on the Billings Refinery

April 28, 2017: Phillips 66 is Increasing Heavy Crude Processing Capability to 100% at Billing Refinery

Greg Garland told analysts during the quarterly earnings conference call on April 28, 2017 pursuing high-return quick-payout projects in refining. "At the Billings Refinery, we're increasing heavy crude processing capability to 100%. This project is expected to be finished later this quarter. At Bayway and Wood River Refineries, we're modernizing SCC units to increase Phillips 66 is clean product yield. Both of these projects are expected to complete in the first half of 2018." Garland added that during the quarter, Phillips 66 had major turnarounds at the Ferndale, Bayway, Lake Charles and Wood River refineries. "So during the quarter, we successfully completed several major turnarounds in Refining and Chemicals. This represents our highest level of turnaround activity in a quarter since the formation of our company."[4]

April 27, 2017: Phillips 66 to Shut Down Billings Refinery for 56 Days in Major Turnaround

The Billings Gazette reported on April 27, 2017 that Phillips 66's Billings Refinery is undergoing a complete shut down as it ramps up for major maintenance and improvements that include replacing the refinery's 68-year old fluid catalytic cracker and adding a process to enable it to process more heavy Canadian crude oil. The “turnaround,” which occurs every five years, will take almost two months to complete and cost several hundred million dollars with 2,500 employees and contractors working on site during its peak. The gradual plant shut down began on April 15, with a total shut down by the beginning of May, said Ryan Wegner, the refinery’s finance and public affairs manager. The refinery will go back online by June. The total turnaround will take about 56 days. One major maintenance item will be to replace the refinery’s fluid catalytic cracker, or FCC, which is a major processing unit that breaks heavy gas oil into other products like gasoline. The FCC is the original unit installed 68 years ago when the plant was built in 1949, Wegner said. Although regular maintenance has kept the unit running, the company decided it was time to replace it, he said. Also included in the turnaround will Phillips 66’s Vacuum Improvement Project, which will allow the refinery to to handle up to 100 percent heavy Canadian crude oil.[5]

February 24, 2017: Phillips 66 Billings Refinery Makes $20,000 Grant to Billings Public Library Foundation

The Billings Gazette reported on February 24, 2017 that the Phillips 66 Billings Refinery made a $20,000 grant to the Billings Public Library Foundation to purchase enough technology to fill six community crates that will each hold up to 60 educational activities for students of all ages. Teen librarian Cody Allen that each crate is packed with gadgets around a theme like astronomy, computer coding, robotics, engineering, science, and audio-visual, including movie-making. The astronomy tote, for example, contains a telescope, along with an electronic tablet so that several students at once can see the celestial body that the telescope is pointed at. Beginning this summer, teachers and others, including the employees of agencies that serve children, will be trained on using the crates. After that, the totes will be available for checkout. Parents of home-schooled students can also receive the training and check out the totes.[6]

November 11, 2016: Phillips 66 Gives $20,000 Grant to Billing Public Library Foundation

The Billings Gazette reported on November 11, 2016 that the Billings Public Library Foundation is the recipient of a $20,000 grant from Phillips 66 that will go to the development of the Community Crates project at the library. Community Crates will be six mobile units with STEAM equipment — science, technology, engineering, art and math — and activities, as well as age- and grade-appropriate curriculum. The crates will help bridge work and programming that’s being offered in the library’s Teen Education and Creation Hub (TECH Lab). The lab opened two years ago and is a digital learning center where teens ages 13-18 learn 21st century STEAM skills.[7]

August 23, 2016: Aging Phillips 66 Pipeline Under Rattlesnake Creek Replaced in Montana

The Missoulian reported on August 23, 2016 that Yellowstone Pipeline and Phillips 66 replaced an aging fuel pipe under Rattlesnake Creek in Missoula County, Montana that is part of a 690-mile network moving liquid fuels like gasoline and diesel between Billings and Moses Lake, Washington. Yellowstone Pipeline manages the network for Phillips 66. “Their deferred maintenance was causing concerns. If there was a break-up, there would be a lot of ice and debris that could cause scour downstream. It’s just too big a risk to leave down here," said Missoula County Environmental Health Supervisor Peter Nielsen. “The old pipeline was less than 2 feet below the streambed. We’ve been very concerned about this. The new line will be 12 or 13 feet down. This will be a lot safer when we’re done.” Yellowstone Pipeline and Phillips 66 have been replacing several water crossings in recent years, including one on the Clark Fork near Turah three years ago and one on Deer Creek east of Missoula last year. Two more replacements are expected this year, near Clinton and Bearmouth on the Clark Fork River. “Once the new line is in service, we’ll thoroughly clean the old section under the creek and permanently seal it off,” said Phillips 66 spokesman Dennis Nuss. “Our ultimate goal is to preserve and protect the creek.”[8]

July 29, 2016: Billings Refinery Is Increasing its Heavy Canadian Crude Run Ability to 100 percent

Phillips announced during their earnings release on July 29, 2016 that the Billings Refinery is increasing its heavy Canadian crude run ability to 100 percent. This project is expected to be complete in the first half of 2017.[9] Greg Garland told analysts during the 2016 second quarter earnings conference call on July 29, 2016 that at the Billings Refinery, efforts are underway to increase the amount of heavy Canadian crude we can run to 100%. At Bayway, work on the FCC modernization is progressing. These are all high return, quick payout projects."[10]

April 29, 2016: Garland Says Efforts Are Underway to Increase Heavy Canadian Crude at Billings Refinery to 100%

Greg Garland told analysts during the 2016 first quarter earnings conference call on April 29, 2016 that t the Billings refinery, efforts are underway to increase the amount of heavy Canadian crude we can run to 100%.[11]

April 29, 2016: Crack Spreads in the Central Corridor including Billings Refinery Were 24% Lower This Quarter

Greg Garland told analysts during the 2016 first quarter earnings conference call on April 29, 2016 that in the Central Corridor lower margins accounted for the majority of the reductions in adjusted earnings from the fourth quarter as market cracks were 24% lower.[12]

April 1, 2016: Phillips Reveals Upgrade Plans for Billings Refinery

Phillips said it was planning upgrades at its Billings Refinery including a $300 million upgrade project to run 100 percent heavy crudes as well as crude oil with high acid content was slated for completion by 2017. [13]

March 3, 2016: Phillips Has $300 million Project at Billings Refinery to Move to 100% Heavy

Greg Garland talked at the Bank of America Merrill Lynch 2016 Refining Conference on March 3, 2016 about some of the optimizing strategies Phillips 66 is utilizing across their system to improve refining margins through selective investments including a $300 million project to help move the Billings Refinery to 100% Heavy. "At Billings, we’re moving to 100% heavy. Also run higher tan crude at Billings, $300 million project, $125 million EDBITA. So you can see these are great projects, great build multiples in excess of 30% return on these projects."[14]

December 16, 2015: Phillips Pipeline Donates $30,000 to Billings Museum

The Billings Gazette reported on December 16, 2015 that Phillips 66 Pipeline donated $30,000 to the Wise Wonders Children's Museum in Billings to improve and expand the downtown space. "We are so excited to get underway with renovations to provide improved facilities and programming," said Kelli Toohill, the museum's executive director. The project will add a multi-use classroom, additional work and exhibition space, and an ADA-accessible family bathroom. The donation will increase the museum space by 50 percent.[15]

December 16, 2015: Phillips Billings Refinery Donates $80,000 to Billings Park

The Billings Gazette reported on December 16, 2015 that the Phillips Refinery in Billings donated $80,000 to the Yellowstone Kelly project to enhance a popular park and honor U.S. veteran Luther Sage “Yellowstone” Kelly, U.S. Army scout and soldier, who died 87 years ago at his ranch in Paradise, California and was a close friend of President Theodore Roosevelt and Gen. Nelson Miles. The plan is to erect a historical interpretive panels, seating, walking trails and a paved turnaround big enough to accommodate buses. The Yellowstone Kelly project would make this forlorn site a gem of the city park system. Deputy Mayor Jani McCall noted at the Phillips 66 celebration that Swords Park averages about 170,000 visitors annually. In addition to Kelly’s grave, the park is rich in history. The Rims were used by Native Americans and later Boothill Cemetery was situated below the cliffs.[16]

December 15, 2015: Phillips Makes Major Upgrade to Billings Refinery

The Helena Independent Record reported on December 15, 2015 that Phillips 66 is spending several hundred million dollars on improvements to its Billings refinery on the "Vacuum Improvement Project" which will allow the refinery to process more heavy Canadian crude oil. The project, which employes an average of 200 construction workers and will peak at 350, will continue into 2017. The refinery will continue to operate throughout the construction period and the project will not increase the refinery's capacity.

“The Billings refinery currently processes a mixture of Canadian heavy, high-sulfur crude oil plus domestic high-sulfur and low-sulfur crude oils, all delivered by pipeline and truck. This project will allow us to handle up to 100 percent heavy Canadian crude,” Phillips 66 officials said. "While it’s technically possible for us to run Bakken crude oil, it is unlikely given the economics."[17]

July 9, 2015: Phillips Billings Refinery is a Yellowstone County Mainstay

Tom Luhey wrote in the Billings Gazette on July 8, 2015 that thousands of familiesin Yellowstone County know the perks of good pay and benefits because of the three refineries in the county. Regional oil development combined with Billings’ role as a railroad hub made Yellowstone County right for refineries in the 1930s, though war delayed the creation of Phillips 66 in Billings and ExxonMobil in Lockwood. “The refinery was actually constructed in 1949 by Continental Oil, but it was planned in 1939,” said Shea Dawson of Phillips 66. “There was a hold-up because of World War II.” The Continental refinery started small at 7,500 barrels of crude processed daily, a number similar to ExxonMobil’s beginnings, though Exxon didn’t begin where it’s now located. "Refineries are basically gigantic chemistry sets, pulling products such as diesel and fertilizer from crude oil," writes Luhey. "The people responsible for that chemistry are really smart. Their presence has been influencing Yellowstone County for more than 70 years."

Roughly 28 percent of Yellowstone County’s manufacturing employment falls within the Petroleum and Coal Products Manufacturing Sector, according to the Montana Department of Labor Research and Analysis Bureau. The average wage in the industry was $121,092 in 2014. “You don’t go to a car dealership and tell them you work at the refinery without having three salesmen trying to tackle you,” said Johnson adding that he doesn’t think people realize how well educated and diverse the refinery workforce is. “A lot of people don’t understand the diversity and intelligence that’s at the refinery, especially in operations. You have people with college degrees that you cannot imagine."[18]

April 27, 2015: Phillips Donates $50,000 for Police Firearms Training Facility

KUL8 reported on Aptril 27, 2015 that Phillips donated $50,000 for a new Firearms Training Facility for the Billings Police Department that will be used by the department for firearms, patrol rifle, and swat team training. Lieutenant Casey Hafner with Billings Police says the landfill donated land south of the landfill off Hillcrest Road for a firearms range and that's where they plan to put the facility.[19]

April 25, 2015: Phillips' Upgrades Almost Completed on Pipelines from Billing Refinery under the East Gallatin River

The Bozeman Daily Chronicle reported on April 25, 2015 that Phillips 66 has almost completed upgrades to crossings under the East Gallatin River which were begun after a 2011 rupture on an ExxonMobil pipeline spilled an estimated 42,000 gallons of oil into the Yellowstone River near Billings. The upgrades involve replacing shallow, trenched crossings dug into the bottom the river with deeper crossings drilled beneath rivers at a depth of 30 to 40 feet which reduces the likelihood that erosion during high-flow periods will wash away the material covering pipes and make them vulnerable to damage. The pipeline carries motor fuels produced by Phillips 66’s Billings refinery to western Montana and eastern Washington, said Phillips 66 spokesman Rich Johnson. The safety administration classifies its contents as a “non-highly volatile liquid” product. Phillips said that it has spent about $90 million on river crossing projects in the Rockies since 2011, including 17 drilled crossings in Montana between 2011 and 2014.[20]

February 27, 2015: Phillips 66 Billings Pipeline Division Takes Proactive Measures to Improve Safety at Pipeline near Mystic Park

Kulr8 News reported on February 27, 2015 that Phillips 66 is getting ready to replace a pipe near Mystic Park and bury it deeper below the Yellowstone River and will proactively replacing the crossing with a directionally-drilled crossing using a machine to drill horizontally more than 40 feet below the Yellowstone River in the bedrock and they'll pull the pipe through. "We kicked up that program,” says Mike Miller, the Billings division pipeline manager at Phillips 66. “We've always had a program but we got very aggressive. That's where we said we're going to look at every crossing up here and do a detailed assessment on it and if there's any concerns we're going to proactively get on it." Miller says these crossings didn't pose any imminent concerns. But it's important to do this because rivers can meander or get deeper. If a pipeline gets exposed, it's at risk. "Part of being a responsible company is being a good neighbor and protecting people and the environment. And it's just one of our core values. And this is a big program. It's one of many elements of our pipeline safety program."[21]

February 7, 2015: Phillips 66 Refinery Workers Stage Informational Picket in Billings to Highlight Understaffing, Safety, and Fatigue

KXLH reported on February 7, 2015 that about 70 union workers and their families held an informational picket for solidarity holding signs reading "Solidarity is Strength" and "Understaffing does not equal Safe Refineries." Billings is home to a Phillips 66 refinery.

President of the local group for Phillips 66 with United Steel Workers Wade Johnson said its also a display of community. Johnson added that "a safe community is important to the guys who work at this plant, it always has been. We take that very seriously," Johnson said. "And understaffing is a serious threat to community and the safety of the community." When asked why understaffing was a threat, Johnson said workers get fatigued. "On paper, these facilities tell us that they're giving us enough staffing. But then they'll pull 10 to 15 percent of the people out on any given week to do other projects. Other people have to cover that with overtime," Johnson said. "I just think we want folks to know that we're part of this community," he said. "All of these actions across the country are community actions. We're trying to get local folks hired at these facilities and we're trying to get enough of us hired so we're not always tired."[22]

December 10, 2015: Phillips Makes $40,000 Donation to Billings Firefighters

The Billings Gazette reported on December 10, 2014 that Phillips has made a $40,000 grant to help protect Billings residents from potentially slower fire and other emergency response times by allowing for videoconference training for firefighters. Fire Chief Paul Dextras and City Administrator Tina Volek announced the grant Friday in an email to Billings City Council members. Volek wrote that she wants to invite Phillips 66 officials to an upcoming City Council meeting “to recognize their contributions to this important piece of the training program that Chief Dextras has helped lead during his time with the department.” The videoconference system will be used widely, Dextras said. “Probably 70-80 percent of our training sessions can be broadcast,” he said. “Embracing this technology will allow us to do so much more. It’s huge for the Fire Department in a lot of ways, and it shows the neat things that Phillips 66 does by contributing to the community.”[23]

December 5, 2014: Phillips 66 Donates $50,000 for ZooMontana Wolverine Habitat

The Billings Gazette reported on December 5, 2014 that Phillips 66 has donated $50,000 to ZooMontana to build a new wolverine habitat and exhibit. “Phillips 66 is committed to both community and environmental education, so we felt this was a great mix of the two,” said Shea Dawson, the Billings refinery’s manager of finance and public affairs, in a news release. “We look forward to the process of helping ZooMontana construct this exciting exhibit.” The new habitat will be located near the junction in the zoo’s central area that leads to either the wolf or tiger habitats. Designs are underway, and zoo officials hope to put it out for bid soon. Construction likely will begin in the summer of 2015.[24]

December 2, 2014: Yellowstone County Reduces Phillips 66’s Tax Bill for Billing Refinery after Settlement

The Billings Gazette reported on December 2, 2014 that Yellowstone County will be disbursing about $3.3 million in protested taxes from the Phillips 66 oil refinery in Billings after the company and the Montana Department of Revenue settled a tax dispute. After making adjustments based on the settlement, the county will return $1.8 million, plus interest, to Phillips 66 and distribute $1.4 million to local taxing jurisdictions. The settlement, said county assessor Max Lenington, resulted in amended valuations for the refinery. The appraised value for 2014 was reduced by $82 million to $579 million, he said. And the appraised value for 2013 was reduced by $114 million to $599 million. Phillips 66 protested its 2013 taxes but paid its 2014 taxes at about the time of the settlement. Lenington said the 2014 tax statement will be corrected to reflect the settlement and re-sent. The settlement reduced the 2014 taxes from $9.3 million to $7.9 million, he said.[25]

October 7, 2014: Phillips Makes $40,000 Grant to 'Pheasants Forever'

The Billings Gazette reported on October 7, 2014 that Phillips awarded a $40,000 grant to 'Pheasants Forever' to help upland birds, other wildlife and bird hunters in Eastern Montana. The conservation group announced this week that the money would go to hiring a seasonal habitat technician, the purchase of a truck and trailer and to accelerate upland habitat work on public lands in Yellowstone, Big Horn and Treasure counties by the Montana Habitat Partnership. “The partnership’s work provides community members the opportunity to spend half a day hunting or running their dog in great habitat close to Billings,” said Dan Bailey, Pheasants Forever’s regional representative for Montana. “As private land becomes increasingly difficult to access, especially around metropolitan areas like Billings, improving the existing habitat to create high-quality public land is more important than ever.”[26]

September 17, 2014: Phillips Billings Refinery Is Third Top Taxpayer in Yellowstone County

The Billings Gazette reported on September 17, 2014 that Phillips Billings Refinery is the third top taxpayer in Yellowstone County with a taxable valuation of $16,500,425.[27]

September 2, 2014: Phillips Starts to Bury 9 miles of the Yellowstone Pipe Line Coming from Billings Refinery

The Greenfield Daily Reporter reported on September 2, 2014 that workers are scheduled to start on the project to bury about 9 miles of the Yellowstone Pipe Line in Shoshone County under the Coeur d'Alene River Road to to eliminate sections that travel under the Coeur d'Alene River to help protect the environment. Phillips 66 spokeswoman Carrie Wildin says the old pipeline will be left in place but will be purged and cleaned, and then permanently sealed. The 690-mile pipeline carries oil from Billings, Montana, to Moses Lake, Washington, with delivery points along the way.[28]

August 5, 2014: Yellowstone County Distributes Protested Taxes From Phillips 66

The Billings Gazette reported on Augusut 5, 2014 that with the settlement of several major tax disputes, millions of dollars in protested taxes have been distributed throughout Yellowstone County in one-time payments. Three of the recently resolved tax disputes involved Charter Communications, which protested tax years 2010-2013; Verizon Wireless, which protested years 2009-2013; and Phillips 66, which protested years 2010-2012. Phillips 66 protested a total of about $6.48 million and received a refund of $2 million, or about 32 percent. Tax protests remaining unresolved include about $3.29 million from Phillips 66 for 2013. While it is good to have the disputes resolved and taxes disbursed, said Yellowstone County Finance Director Scott Turner, there will be an overall decrease in the county’s base value because of the settlements. That means one mill levied will raise fewer tax dollars.[29]

July 30, 2014: Judge Grants Phillips Pipeline Access From Canada to Billings

Cheminfo reported on July 30, 2014 that Phillips will be able to continue operating three pipelines that transport crude oil from Canada after a judge granted access to the final land parcel whose easement had expired. Phillips 66 had negotiated access agreements with about 600 landowners and the tribe where the pipelines cross the Blackfeet Reservation, but filed a condemnation complaint in federal court against the owners of one parcel when negotiations failed. U.S. District Judge Sam Haddon ruled in favor of Phillips 66 and ordered the company to pay the landowners $1,450 in compensation for access to the final parcel concluding that the pipeline locations are reasonable and they are necessary for public use. The company said relocating the 8-inch and two 12-inch pipelines would have cost $2 million.[30]

July 30, 2014: Fire Caused Some Reduced Capacity and Throughput at Billings Refinery

Greg Garland told analysts during the 2nd quarter earnings conference on July 30, 2014 that the fire at the Billings refinery caused some reduced capacity and throughput at our billings facilities. "I think you’re always going to have some ups and some downs and in and outs and we did during the quarter. We had some issues, we had small fire at buildings and so we saw some reduced capacity and throughput at our billings facilities. But in generally I’ll tell you across the system, solid operations."[31]

July 9, 2014: Phillips Pledges $750,000 to Support STEM Education in Billings

The Billings Gazette reported on July 9, 2014 that has pledged to donate $750,000 over three years to support enhanced science, technology, engineering and math (STEM) education in Billings School District 2 elementary and middle schools. Ray Rigdon, the refinery's manager, said that the donation comes from Phillips 66's Signature Community Initiative, in which it partners with local groups and nonprofits to address targeted, defined issues within the community. "It makes a meaningful investment ... to solve specific community problems with meaningful results," said Rigdon. The money will also fund a technology training center for teachers, students and community members that is expected to open in the fall at Orchard.[32]

June 12, 2014: Fire Crew Extinguishes Blaze in Crude Unit at Billings Refinery

The Billings Gazette reported on June 12, 2014 that a fire broke out at the large crude unit at the Billings Refinery at about 1:45 that was extinguished in about 15 minutes by on-site personnel. According to Phillips spokesman Travis Sloane, no one was injured in the fire and employees have been dispatched off-site while air quality is measured There does not appear to be any environmental harm as a result of the fire.[33]

June 11, 2014: Phillips Shuts CRU, VDU at Billings Refinery Due to Crude Unit Fire

A fire in the crude unit at Phillips 66’s refinery in Billings, Montana, on Wednesday forced the company to shut two major units for an indefinite period of time. The 38,000 b/d catalytic reforming unit (CRU) and 35,000 b/d vacuum distillation unit (VDU) were shut down on Wednesday afternoon, according to research company Genscape. Late Wednesday Phillips said it had a fire in the large crude unit, which had been extinguished onsite by emergency response personnel. It provided no estimate on the duration of the closure. [34]

July 18, 2013: Phillips Pays Fine for Billings Refinery Pollution Violations

The Daily Journal reported on July 18, 2013 that Phillips has paid $17,075 to resolve pollution violations involving wastewater from the company's Billings refinery when the Montana Department of Environmental Quality said Phillips' refinery exceeded chlorine limits in its wastewater in 2010, and limits on oil and grease in 2012. Phillips used chlorinated water which is toxic to fish to test a large storage tank for leaks, but did not remove the chlorine prior to draining the tank.[35]

July 12, 2013: Phillips Blames Shifting Land for 25,000 Gallon Crow Reservation Oil Spill

KULR News reported on July 12, 2013 that Phillips 66 says shifting land appears to have damaged an underground pipeline that spilled up to 25,000 gallons of gasoline on the Crow Reservation west of Lodge Grass. Phillips says that it has completed repairs on its 8-inch underground Seminoe line and a cleanup plan is pending. The line is expected to be put back into operation by July 14, 2013 and spokesman Dennis Nuss says by the time of the restart the company will have fulfilled safety actions requested by federal regulators to prevent further problems.[36]

July 9, 2013: Phillips Plans New Oil Pipeline across Yellowstone River

KTVQ reported on July 9, 2013 that Phillips plans to build a new petroleum pipeline across the Yellowstone River in Montana after a survey conducted in 2011 found that the existing Phillips pipeline was only covered by two to six feet of river bed. The project comes two years after Exxon's pipeline broke in the Yellowstone River, spewing 63,000 gallons of crude oil into the water. Phillips wants to construct a new line that would run 40 feet underneath the water to prevent the line from breaking. The Montana Department of Natural Resources & Conservation recommends that Phillips 66 remove the old pipeline as part of the project but Phillips disagrees with this recommendation. The Montana Land Board will vote on whether or not to grant the construction permit on July 15, 2013.[37]

July 5, 2013: Phillips Gas pipeline Spills 25,000 Gallons on Crow Reservation in Montana

UPI reported on July 5, 2013 that a Phillips 66 pipeline spilled 25,000 gallons of gasoline on the Crow Reservation in southeastern Montana. The same pipeline broke twice in one week in 1997, spilling an estimated 2,300 barrels of gasoline near Lodge Grass and Banner, NBC News said. A U.S. Department of Transportation spokesman said the leak, which occurred about 15 miles from Lodge Grass, Mont., was under investigation but posed no safety threat to the public and did not immediately affect any waterways.[38] Phillips 66 says the pipeline transports finished petroleum products such as gasoline and diesel from its Billings refinery to Wyoming, Utah, and Colorado. Spokesman Dennis Nuss says Phillips immediately shut down the pipeline and that there are no anticipated health concerns. Crow Tribal Chair Darrin Old Coyote confirmed this and also said the leak is not near any homes or streams. "Phillips 66 was the one who reported it," Old Coyote said. "The pipeline is shut down and they are mobilizing their equipment to actually do the cleanup. No evacuations have taken place, but they are doing traffic control because the area is close to the road that goes from Hardin to Fort Smith."[39] In 2004, the Conoco Pipe Line Co. agreed to pay $465,000 for environmental violations after the line broke twice in a week in 1997, spilling more than 2,300 barrels of gasoline near Lodge Grass and Banner, Wyo.[40]

May 31, 2013: Phillips Continues Tax Protest at Billings Refining

Clair Johnson reported in the Billings Gazette on May 31, 2013 that Phillips paid its second-half 2012 Yellowstone County property taxes of $3.9 million with $1.3 million protested while its long-running tax dispute with the state of Montana continues. Taxes paid under protest are held in an escrow account pending resolution of the dispute. Taxing jurisdictions can demand distribution of the protested taxes but may have to repay the money depending on how the issues are resolved. Phillips 66 appealed its tax assessment to the Yellowstone County Tax Appeals Board, which sided with the company. The Revenue Department then appealed that decision to the Montana State Tax Appeals Board, which has not yet ruled. Another oil refiner, CHS refinery in Laurel, paid $4.08 million, with $1.6 million paid under protest.[41]

May 21, 2013: Phillips Refinery Manager Julian Stoll Bullish on Billings Refinery's Future

Jay Kohn reported for KTVQ on May 21, 2013 that Billngs Refinery employs 295 full time employees and about 100 contractors. Refinery Manager Julian Stoll told the reporter that 98% of the crude processed in Billings Refinery comes from Canada and that production is 60,000 bpd with the two new coke units installed last year, up from 7,500 bpd when the refinery was built in 1949.[42]

December 28, 2012: Billings Refinery Back to Normal After Flaring

The Billings Gazette reported on December 29, 2012 that the Billings Refinery is back to normal operations after a compressor that pumps gases from the cracker unit twice tripped offline and a pressure relief valve did not close properly triggering flaring of excess gases. The plant’s main processing unit, the fluid catalytic cracker (FCCU), is back online and operating normally said Phillips spokesman Travis Sloan. "“The refinery is back to normal operations as of 7:20 p.m. last night." The refinery used its flare-gas recovery system to remove sulfides from the gas to cut the amount of sulfur dioxide pollution from the flare and a refinery official reported that flaring at the plant only emitted between eight and 30 pounds a day of sulfur dioxide during the event. The refinery’s air quality permit limits the amount of pollution that can be released by flaring to 150 pounds over a three-hour period, or 1,200 pounds a day. Neither of those limits was exceeded said Jim Hughes, an environmental specialist with the Montana Department of Environmental Quality.[43]

December 27, 2012: Compressor Failure Leads to Large Flames Shooting from Billings Refinery's Main Flare Stack

The Billings Gazette reported on December 27, 2012 that the failure of a wet-gas compressor on the fluid catalytic cracking unit (FCCU) is to blame for large flames shooting from the refinery's main flare stack that can be seen from the eastern half of Billings. "There is a back pressure release valve that is stuck," says Jim Hughes, an environmental specialist in Billings with the Montana Department of Environmental Quality, adding that there isn't any known public danger. "They haven’t been able to completely close it, so there are gases that are still escaping." Phillips 66 officials also offered reassurance. "We are currently in the process of restoring normal operations," says Travis Sloan, a Phillips 66 spokesman. "Refinery personnel have been monitoring air quality, and there remains no concern for the public at this time. Phillips 66 is committed to protecting the safety and environment in the communities we operate."[44]

December 22, 2012: Phillips to Remove Oil Pipeline beneath Bighorn River

The Missoulian reported on December 22, 2012 that Phillips 66 is removing an oil pipeline from beneath Bighorn River after determining the line had to be abandoned because it was increasingly exposed by erosion. The planned removal comes in the wake of a break in an Exxon Mobil Corp. pipeline last year beneath the Yellowstone River that spilled an estimated 63,000 barrels of crude into the flooding river and contaminated 70 miles of riverbank. "Like a lot of the older pipelines around here, it wasn't buried real deep," said Fish, Wildlife and Parks spokesman Bob Gibson. "This was one that was considered at risk, and there were times it was exposed. This is good — getting it proactively and replacing it before it pops."[45]

September 19, 2012: Phillips Sues Yellowstone County over Property Taxes on Billing Refinery

Equities.com reported on September 19 that Phillips 66 has taken its property tax protest involving its Billings refinery to court in Yellowstone County filing a complaint that the Montana Department of Revenue illegally or improperly raised the refinery's market value for 2010, resulting in a tax bill that was $623,715 higher. Phillips asked Yellowstone District Judge Ingrid Gustafson to block its revised tax assessment, saying it will "suffer irreparable injury absent the issuance of a preliminary injunction." The complaint also said Montana is improperly trying to retroactively raise the refinery's tax assessment from 2003 through 2010 in order to collect more taxes. The refinery's market value in 2010 should be $379,718,534, said Phillips, not the department's retroactive change to $508,333,155. Revenue Department officials in Helena says they conducted a routine audit in July and found that Phillips 66 refinery property that had “either escaped assessment, been erroneously assessed or omitted from taxation” from 2003 to 2010, said department spokeswoman Mary Ann Dunwell. Revenue Department officials in Helena said that they are reviewing the complaint and plan to file a response by the end of next week.[46]

September 19, 2012: Billing Refinery Plans Disaster Simulation

The Billings Gazette reported on September 19, 2012 that the Billings refinery will simulate a disaster on September 26, 2012 affecting about 60 volunteers who will have fake but real-looking wounds to test the community’s response to a full-scale disaster. The code name for the operation is COYOTE 2012, which is short for “County of Yellowstone Operating Together in an Emergency.” Held every few years, the drill allows emergency responders and agencies to test their plans in an effort to improve services and to ensure the public receives the highest level of service possible, said Duane Winslow, Yellowstone County’s director of Disaster and Emergency Services.[47]

July 14, 2012: Phillips Protests Property Tax for Billings Refinery

The Missoulian reported on July 14 that Phillips is one of seven refinery, utility and communications companies in Yellowstone County that is protesting their property tax bill for the 2011 tax year. When a company protests its tax bill, the money is placed in an escrow account, earning interest, until the argument is settled. Schools and other taxing entities who were counting on the funds can tap into these “frozen” taxes, but must repay some or all of the money with interest if the taxpayer wins the protest.[48]

May 30, 2012: Phillips Fires 21 Union Workers, 3 Supervisors at Billing Refinery for Stealing Hours

The Billings Gazette reported on May 30, 2012 that according to Wade Johnson, president of the United Steelworkers International union in Billing that twenty-one pipefitters, welders and insulators and three supervisors were fired from the Phillips 66 refinery on May 30, 2012. “They were certainly not given an option of keeping their jobs,” said Johnson. “So, I would call that being fired.” Rich Johnson, a Phillips 66 spokesman based in Houston, said the company took some individual personnel actions. “I can tell you we took personnel actions against employees today,” said Johnson said. “But it is our company policy not to comment on personnel matters.” According to KTVQ TX the workers were fired for for knowingly violating policy in regard to hours worked at the refinery. "There are no mass layoffs taking place at the refinery," said Johnson.[49][50]

KTVQ reported on May 31, 2012 that the United Steelworkers International union says it plans to fight the dismissal of 21 union employees at the Billings Phillips 66 refinery. Union president, Wade Johnson, with the United Steelworkers International in Billings, says the union believes the employees were wrongfully discharged.[51] According to a comment to the story by Kathy Reinhardt the fired workers were called in to work extra hours so that turnaround could be completed at the refinery. According to a comment by Jonathon Sapp the supervisor who called the men in to work should have been held responsible.[52]

May 15, 2012: Smell at Billings Refinery Alarms Downtown Businesses

The Billings Gazette reported on May 15, 2012 that a foul odor from the Billings Refinery prompted some downtown Billings businesses to evacuate. The smell originated from Phillips 66 refinery and was harmless. "We try to to minimize any odors coming from our facility, but during start-up it happens," said Travis Sloan of Phillips 66. The refinery didn't evacuate, Sloan said, but did send observers into surrounding neighborhoods to monitor the smell, which was harmless and dissipated after 20 minutes. Sloan added that the Billings facility has been out of service for its on-going turn around, that started the last week in March. "We did not evacuate anybody, but certainly there were businesses downtown that evacuated their own buildings," said Frank Odermann, Billings Fire Department assistant chief. Odermann added that since the chemical release quickly dissipated, there are no on-going health concerns.[53][54]

May 1, 2012: Billings Refinery Anticipates No Major Changes

KTVQ reported on May 1, 2012 that there will be no major changes with the Billings Refinery in Billing, Montana. "We don't expect any significant changes to our local operations. We are excited about being part of a new, independent downstream energy company. Phillips 66 has a robust portfolio of businesses that already rank among the best-performing players in their industry segments, a strong financial position, an extraordinary global workforce, and a continued commitment to safety and operating excellence."[55]

References

  1. ConocoPhillips. "US Refining as of March 31, 2011"
  2. ConocoPhillips. "US Refining as of March 31, 2011"
  3. Equities.com "Phillips 66 Billings refinery sues over property taxes" September 19, 2012.
  4. Yahoo Finance. "Q1 2017 Phillips 66 Earnings Call" April 28, 2017.
  5. Billing Gazette. "Billings Phillips 66 oil refinery begins major maintenance project" by Claire Johnson. April 27, 2017.
  6. Billings Gazette. "Six community crates will help bring the library to young learners" by Mike Ferguson. February 23, 2017.
  7. Billings Gazette. "Phillips 66 grant will develop Community Crates at the library" November 11, 2016.
  8. The Missoulian. "Pipeline replacement muddies Rattlesnake Creek" by Rob Chaney. August 24, 2016.
  9. Phillips 66. "Phillips 66 Reports Second-Quarter Earnings of $496 Million or $0.93 Per Share" July 29, 2016.
  10. Seeking Alpha. "Phillips 66 Reports Second-Quarter Earnings of $496 Million or $0.93 Per Share" July 29, 2016.
  11. Seeking Alpha. "Phillips 66's (PSX) CEO Greg Garland on Q1 2016 Results - Earnings Call Transcript" April 29, 2016.
  12. Seeking Alpha. "Phillips 66's (PSX) CEO Greg Garland on Q1 2016 Results - Earnings Call Transcript" April 29, 2016.
  13. Department of Energy. "Energy Assurance Daily" April 1, 2016
  14. Phillips 66. "Phillips 66 presents at the Bank of America Merrill Lynch 2016 Refining Conference" March 3, 2016.
  15. Billings Gazette. "$30K donation will expand children's museum" December 16, 2015.
  16. Billings Gazette. "Historic partnership invests in Billings parks" December 16, 2015.
  17. Helena Independent Record. "Phillips 66 working on major refinery upgrade in Billings" by Tom Howard. December 15, 2015.
  18. Billings Gazette. "Oil refineries are a Yellowstone County mainstay" by Tom Lutey. July 9, 2015.
  19. KULR8. "New Firearms Training Facility in the Works" April 27, 2015.
  20. Bozeman Daily Chronicle. "Oil pipeline under East Gallatin upgraded for safety" by Eric Dietrich. April 25, 2015.
  21. Kulr8 News. "Phillips 66 Taking Proactive Measures to Improve Safety" February 27, 2015.
  22. KXHL. "http://www.kxlh.com/story/28053374/union-workers-stage-informational-picket-outside-conocophillips-facility-in-billings" February 7, 2015.
  23. Billings Gazette. "Grant from Phillips 66 will allow firefighters to videoconference" by Mike Ferguson. December10, 2014.
  24. Billings Gazette. "Phillips 66 donates $50K for ZooMontana wolverine habitat" by Zach Benoit. December 5, 2014.
  25. Billings. Gazette. "County adjusts Phillips 66’s tax bill after settlement" by Clair Johnson. December 2, 2014.
  26. Billings Gazette. "Grant funds new upland habitat position" October 7, 2014.
  27. Billings Gazette. "CHS refinery is top taxpayer in Yellowstone County" September 17, 2014.
  28. Greenfield Daily Reporter. "N. Idaho oil pipeline being rerouted from under Coeur d'Alene River" September 2, 2014.
  29. Billings Gazette. "Yellowstone County distributes protested taxes" by Clair Johnson. August 5, 2014.
  30. Cheminfo. "Canada-Billings Pipeline Access Granted" July 30, 2014.
  31. Seeking Alpha. "Phillips 66's (PSX) CEO Greg Garland on Q2 2014 Results - Earnings Call Transcript" July 30, 2014.
  32. Billings Gazette. "Phillips 66 gives $750K to SD2's science, technology program" by Zach Benoit. July 9, 2014.
  33. Billings Gazette. "Phillips 66 fire crew extinguishes blaze in crude unit" by Chris Cioffi. June 12, 2014.
  34. US Department of Energy. "Energy Assurance Daily" June 12, 2014
  35. Daily Journal. "Phillips 66 pays $17,075 to Montana agency for Billings refinery wastewater violations" July 18, 2013.
  36. KULR News. "Shifting land blamed in Crow reservation gas spill" July 12, 2013.
  37. KTVQ. "Phillips 66 plans to construct oil pipeline across Yellowstone River" by Marnee Banks. July 9, 2013.
  38. UPI. "Gas pipeline breaks, spills 25K gallons on Crow reservation in Mont. July 5, 2013.
  39. KPAX. "Pipeline leaks gasoline on Crow Reservation" by David Jay. July 5, 2013.
  40. Billings Gazette. "Cleanup, investigation underway after Phillips 66 pipeline leaks gas on Crow land" by Cindy Uken. July 4, 2013.
  41. Billings Gazette. "CHS, Phillips 66 refineries continue tax protests" by Clair Johnson. May 31, 2013.
  42. KTVQ. "The Pipeline: Phillips 66 Refinery Manager bullish on plant's future" by Jay Kohn. May 21, 2013.
  43. Billings Gazette. "Phillips 66 refinery back to normal after flaring" by Clair Johnson. December 28, 2012.
  44. Billings Gazette. "Compressor failure leads to larger flare at Phillips 66 refinery" by Zach Benoit. December 27, 2012.
  45. Missoulian. "Phillips 66 to remove oil pipeline beneath Bighorn River" December 22, 2012.
  46. Equities.com "Phillips 66 Billings refinery sues over property taxes" September 19, 2012.
  47. Billings Gazette. "Community disaster drill planned at Phillips 66 refinery" September 19, 2012.
  48. The Missoulian. "Corporate tax protests a concern in Yellowstone County" July 14, 2012.
  49. Billings Gazette. "Phillips 66 refinery in Billings fires 21 union workers, 3 supervisors" May 30, 2012.
  50. KTVQ TX. "Local refinery fires two dozen employees, for stealing time" May 30, 2012.
  51. KTVQ. "Union representative says employees wrongfully discharged from Phillips 66" by Q2 News. May 31, 2012.
  52. KTVQ. "Union representative says employees wrongfully discharged from Phillips 66" by Q2 News. May 31, 2012.
  53. Billings Gazette. "Refinery smell alarms downtown businesses" by Tom Lutey. May 15, 2012.
  54. KTVQ. "Downtown sulfur smell came from Phillips 66 refinery" May 15, 2012/
  55. KTVQ. "Local refinery in Billings becomes Phillips 66" by Drew Trafton. May 1,2012.



Master Index of Articles about Phillips 66

The North Tower and the South Tower, part of Phillips 66's Refinery Complex in Ponca City, contain over 250,000 square feet of Class A office space that is essentially unused. Research West contains another 230,000 square feet of unused Class A office space. Photo: Hugh Pickens
Ponca: A Core Asset. Phillips CEO Greg Garland told members of the Bartlesville Chamber of Commerce on August 27, 2013 that the refinery at Ponca is a 'core asset' of Phillips 66. The refinery in Ponca City "is making very good money for us," Garland told his Bartlesville audience. Garland added that he expects gas demands in the U.S. to decline by 20 percent in the next 10 years, but that demand for refined products in South America and Africa will more than offset that decline.

by Hugh Pickens, Ponca City Oklahoma


The purpose of this report is to provide a comprehensive overview of Phillips 66 that documents and explains the company's business strategy and execution of that strategy.

Major Sections of this report on Phillips 66 include:

Safety, Environment, Legal


Corporate


Strategic and Financial


Business Segments


Stock Market


Reference

Refining Business Segment


Increasing Profitability in Refining Business Segment


Detailed Look at Ponca City Refinery


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